The Department of Labor (DOL) has advised its field staff that it is reconsidering the 2024 independent contractor rule and will no longer apply the rule when conducting Fair Labor Standards Act (FLSA) investigations. The Department of Labor has asked an appellate court to pause the litigation concerning the FLSA overtime rule enacted by the Biden Administration. A bipartisan paid family leave bill was introduced in the House of Representatives. Brittany Panuccio has been nominated to be an Equal Employment Opportunity Commission (EEOC) commissioner.
DOL Will No Longer Enforce 2024 Independent Contractor Rule – The Department of Labor (DOL) issued Field Assistance Bulletin 2025-1 to its field staff advising that it is reconsidering the rule finalized in 2024 concerning independent contractors including whether to rescind the regulation. The Wage and Hour Division indicated that when conducting FLSA investigations, it will no longer apply the 2024 rule when determining employee or independent contractor status. For private litigation, the 2024 rule remains in effect.
The Department has taken the position in pending lawsuits challenging the 2024 independent contractor rule that it is reconsidering the 2024 rule, including whether to rescind the regulation. Specifically, WHD is currently reviewing and developing the appropriate standard for determining FLSA employee versus independent contractor status.
The Wage and Hour Division stated that it will enforce the FLSA in accordance with Fact Sheet #13 that was issued in 2008 and includes the notation that it is consistent with the Division’s current enforcement position. According to the Fact Sheet, the United States Supreme Court has stated that it is the “total activity or situation which controls” whether an individual is an employee or independent contractor under the Fair Labor Standards Act (FLSA). Factors considered significant by the Supreme Court include: the extent to which the services are an integral part of the business, permanency of the relationship, amount of investment by the alleged contractor in facilities and equipment, nature and degree of control by the principal, opportunities for profit or loss by the alleged contractor, level of initiative, judgment or foresight required by the independent contractor, and the degree of independent business organization and operation. There are several immaterial factors according to the Wage and Hour Division cited by the Supreme Court such as where work is performed, lack of a formal employment agreement, or whether an alleged independent contractor is licensed by a state or local government.
The Wage and Hour Division also cited a Wage-Hour Opinion Letter from 2019 that it has reissued as Wage-Hour Opinion Letter 2025-2. In this Opinion Letter, the Wage and Hour Division stated that it “does not determine employee status by simply counting factors, but by weighing these factors in order to answer the ultimate inquiry of whether the worker is engaged in business for himself or herself or is dependent upon the business to which he or she renders service.”
DOL Pauses Appeal of FLSA Overtime Rule Challenge – The Department of Labor (DOL) requested that the United States Court of Appeals for the Fifth Circuit place in abeyance the appeals of two District Court decisions finding that the Fair Labor Standards Act (FLSA) overtime rule enacted by the Biden Administration exceeded the statutory authority of the DOL. The request in the cases of State of Texas v. United States Department of Labor and Flint Avenue LLC v. United States Department of Labor noted that with the change in administrations, DOL intends to reconsider the rule that was challenged in these cases.
The Biden Administration finalized a rule that would have increased the minimum salary threshold for executive, administrative, and professional employees to be considered exempt to $58,656 per year in 2025 with automatic increases every three years. The current salary basis is $35,568 per year.
Bipartisan Paid Leave Bill Introduced – The More Paid Leave for More Americans Act (H.R. 3089) was introduced by a bipartisan group of members of the House of Representatives led by Representatives Chrissy Houlahan (D-PA) and Stephanie Bice (R-OK). The primary sponsors serve as the co-chairs of the House Paid Family Leave Working Group. According to Representative Houlahan this legislation is the result of two years of work by a group of bipartisan members of the House of Representatives and is designed to expand “access to paid family leave across the
country through state-driven, innovative, and sustainable solutions.” Representative Houlahan noted that the United States is one of the few developed countries that does not have a national paid family leave policy.
The bill would create a three-year pilot program administered by the Department of Labor that would provide grants to states that establish paid family leave programs through partnerships with private entities. To qualify for the grants, states would need to offer at least 6 weeks of paid leave for birth or adoption, wage replacement between 50% – 67% based on income that is capped at an amount equal to 150% of the state’s average weekly wage, and participation in the Interstate Paid Leave Action Network (I-PLAN) that would be established. The I-PLAN would develop best practices based on existing state programs, help states harmonize policies and resolve conflicts, and support the creation of an electronic communication system to promote integrity, efficiency, and accessibility.
The bill has been referred to the Committee on Education and the Workforce along with several other committees that have jurisdiction over parts of the legislation.
EEOC Commissioner Nominated – President Trump nominated Brittany Panuccio to serve as an Equal Employment Opportunity Commission (EEOC) commissioner. She is currently an assistant United States Attorney in the Southern District of Florida. Her nomination requires Senate confirmation, and it has been referred to the Committee on Health, Labor, Education, and Pensions (HELP). If confirmed, the EEOC would have the required three commissioners needed to constitute a quorum and it could vote on rulemaking, issue new policies, or rescind guidance documents.
Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.
