On May 1, 2025, the U.S. Department of Labor, Wage and Hour Division (WHD) released a policy update that alters enforcement of the Fair Labor Standards Act (FLSA) when evaluating whether a worker is classified as an employee or an independent contractor.
In Field Assistance Bulletin (FAB) No. 2025-1, the Department formally announced that WHD will no longer apply the framework established in the 2024 rule “Employee or Independent Contractor Classification Under the Fair Labor Standards Act”. The 2024 Rule is currently being challenged in federal court, and the Department is considering next steps, including a possible rescission.
According to FAB No. 2025-1, “WHD will enforce the FLSA in accordance with Fact Sheet #13 (July 2008), and as further informed by Opinion Letter FLSA2019-6 with respect to any matters for which no payment has been made, directly to individuals or to DOL, for back wages and/or civil money penalties as of May 1, 2025.”
The Department of Labor’s reassessment of the 2024 Rule suggests potential new rulemaking could follow. Until then, employers should reassess their contractor relationships and ensure compliance to avoid possible enforcement action.
A copy of the Field Assistance Bulletin, which has links to Fact Sheet #13 and FLSA2019-6, can be found here.