The latest independent contractor (IC) rule proposed Thursday by the Wage & Hour division of the Department of Labor is being viewed as mostly a carbon copy of the first Trump administration’s regulation.

The strange twist of that first Trump regulation is that it was formally implemented in the last days of the first Trump administration, was kept alive by a court order after the Biden administration attempted to kill it without going through a rulemaking process, and ended up being legally in place until the Biden IC rule went into effect in early 2024.

What all that means is that a Trump IC rule was in effect at the Wage & Hour division of the DOL for most of the Biden administration.

That the Trump administration would target the Biden IC rule at the Wage & Hour division was never in question. That was signaled in September as part of the Trump administration’s regulatory agenda. 

Can have a long run

But with the early 2026 release of the proposed Trump rule, it is possible that for at least half of the remainder of the Trump administration, it will have had its own rule on IC status in place at the Wage & Hour division, where the rule will provide guidance in settling worker classification disputes that come before the agency.

In a prepared statement released in conjunction with the publication of the proposed rule in the Federal Register, the DOL said its IC guidelines “would make it easier to properly differentiate between employees with the protections under the Fair Labor Standards Act and those workers who work as independent contractors.”

At stake in the distinction between employee and IC, whether that decision will be made before the Wage & Hour division in a dispute pursued in that forum, or in a court, is the requirement that employers must extend to employees numerous legally-mandated benefits, such as overtime payments, workers compensation, minimum wages and Social Security contributions.   

The most significant difference between the Trump rule and the Biden rule always was the former’s elevation of two standards above a five-point set of guidelines to determine whether a worker is a true IC or should be considered an employee.

In an email message sent soon after the release of the DOL proposal, the trucking-focused Scopelitis law firm said the new Trump proposal, like its earlier rule, “emphasizes the concurrence of two factors – control and the opportunity for profit or loss – as core guideposts (and) is intended to provide more predictability and certainty regarding the worker’s status.”

The  Fisher Phillips law firm, which focuses on labor and employee relations, said something similar in an email blast sent out after the proposal was released.

Five tests, two are more important

“Similar to the rule released during the first Trump administration, the proposal evaluates the ‘economic realities’ of the working relationship,” the firm said. “The proposal outlines two core factors, placing greater weight on the individual’s control over the work; and their opportunity for profit or loss.”

The proposed Trump rule does still contain three other tests that the Wage & Hour division would be expected to consider in cases involving IC status. Those three, according to the Department of Labor, are “the amount of skill required for the work, degree of permanence of the working relationship, and whether the work is part of an integrated unit of production.”

But under the Biden rule, while none of the five were considered dispositive, all were to be weighed equally. That always was seen as making it more likely for the Wage & Hour division to conclude a worker was an employee rather than an IC. 

But by elevating the control and profit/loss standards, observers believe a finding of employee status becomes less likely.

Is it a big deal?

Richard Reibstein, a partner with the law firm of Troutman Locke who specializes in IC law, has long argued in his blog that the Wage & Hour division’s IC rule receives an outsized amount of attention. His argument has been that it is federal and state courts and their decisions on IC-related litigation that has far more impact in creating legal precedents used to settle classification disputes.

Reibstein said the new rule would be “much ado about nothing.”

He said except for minor differences, “a review of the proposed regulation…has no meaningful differences from the wording of the 2021 rule on IC status issued by the first Trump administration.”

With “control” being one of the two “core factors” in the new/revived rule, Reibstein said the Trump rule does not view a worker as being under “control”–and therefore more likely an employee than an IC–if that worker needs to do such things as “satisfy health and safety standards; comply with specific legal obligations; satisfy health and safety standards,” and several other points.

There had been concern in the trucking industry about the Biden administration rule that some requirements considered standard activities for their ICs could be interpreted as constituting “control,” thereby making the worker an employee. 

Reibstein said the new rule, when formally adopted, is likely to face lawsuits. 

But returning to his theme that the Labor Department IC rule is less significant in the history of IC legal precedents than public debate would otherwise signal, Reibstein wrote that “because no court has relied upon either of those (Trump/Biden) rules in determining the IC status of workers, such litigation has limited practical meaning.”

Comments on the proposed rule are open until the end of the day on April 28. The portal for the rule can be accessed at Regulation.gov.

The American Trucking Associations, long a critic of the Biden administration rule, released a statement that said the latest Trump IC proposal “represents a significant step forward to defend the livelihoods of the hundreds of thousands of truckers who choose to work as independent contractors,” quoting ATA President & CEO Chris Spear.  “We thank President Trump for listening to the concerns of professional drivers and taking action to protect individual opportunity, our supply chain, and our economy. “

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