On February 26, 2026, the US Department of Labor (DOL) proposed a new rule for classifying workers as employees or independent contractors. This proposed rule adjusts the existing method and criteria involved in determining which category a worker falls into. As employee classification affects other federal employment laws and benefits, this proposed rule may have significant implications for employers, workers, and litigators.
The Proposed Rule: What Is Changing?
The proposed rule essentially reverts the employee-independent contractor classification standards to the DOL’s 2021 framework published under the first Trump administration, rescinding the changes made in 2024 Biden-era final rule. According to the DOL, the proposed rule would alter the longstanding “economic reality” test to streamline decisions on employee classification. The thrust of the proposed rule is to make it easier for employers to classify workers as independent contractors instead of as employees.
