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Since President Donald Trump took back the White House just over a year ago, the Department of Labor has followed his leadership with a singular vision: Put American workers first in everything we do.
As a small business owner who has traveled the country on my 50-state listening tour, I can say confidently that our nation’s labor force is the envy of the world, and workers are thriving under the return of America First leadership. In this fast-changing global landscape, the Trump administration is committed to ensuring our workers have the tools and opportunities they need to compete and earn a good, honest living without unnecessary government intrusion.
In that spirit, the Department of Labor’s Wage and Hour Division released a proposed rule that provides clarity to help workers and employers alike determine when a worker is properly classified as an independent contractor and when that worker is an employee owed rigorous protections under the Fair Labor Standards Act (FLSA). In proposing this rule, we celebrate the decisions of Americans who choose to test their entrepreneurial spirit — the same spirit on which our country was founded 250 years ago.
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The way Americans work is rapidly changing, and several states are responding by restricting opportunities for workers to choose independent work in the name of reducing worker misclassification. Eliminating worker misclassification is necessary to ensure workers receive what they are owed. But doing so in a way that severely restricts Americans’ freedom to work as they choose stifles ambition, betrays our foundational values as a nation and harms our economy.
The way Americans work is rapidly changing, and several states are responding by restricting opportunities for workers to choose independent work in the name of reducing worker misclassification.
Under President Trump’s leadership, the Department of Labor is taking a better approach. By providing American workers and employers with clear guidance within the confines of longstanding legal precedent, my department balances the need to give independent workers and entrepreneurs the flexibility they want with our mandate to preserve the robust legal protections owed to true FLSA employees.
To that end, our proposed rule would rescind the Biden administration’s 2024 independent contractor rule, which made it harder to work as an independent contractor and led to more confusion than clarity. If left in place, the Biden rule would continue to produce unpredictable results that harm workers and employers alike.
To provide much-needed clarity and help employers comply with the FLSA, our proposed rule would:
- Use the longstanding “economic reality” test adopted by federal courts to determine a worker’s proper classification.
- Identify two “core” factors most useful in determining a worker’s classification: the nature and degree of control the worker has over the work and the worker’s opportunity for profit or loss.
- Advise that three additional factors — skill, permanence, and whether the work is part of an integrated unit of production — have value in this analysis but are typically less useful in determining classification.
- Clarify that the actual practice of a work arrangement — the on-the-ground reality between worker and employer — is more relevant than what is contractually or theoretically possible.
- Provide eight concrete examples of how the factors would apply in real-world circumstances.
No matter the complexity or scope of the work arrangement — whether it involves a rideshare driver, an independent trucker or a freelance writer — the proposed rule will make it easier to define work roles with greater predictability.
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By grounding this classification structure in longstanding legal principles and offering illustrative examples of real-world applications, the proposed rule will deliver tangible benefits for independent workers and employees alike.
These changes will also empower employers by reducing the risk of FLSA misclassification violations, which hurt workers and employers who are playing by the rules.
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I encourage all interested parties to submit public comments to the department during the 60-day comment period, which is set to end April 28.
With your help, and under President Trump’s leadership, the Department of Labor will continue to fight for American workers every day to ensure their rights and needs come first.
CLICK HERE TO READ MORE FROM LABOR SECRETARY LORI CHAVEZ-DEREMER
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