Employee or independent contractor under US federal wage law: the rule history

This page reports what the official source says. It is not legal advice: ask the office named here. It lists notices and what they say about themselves. It does not say how any worker or crew would be classified. The Department of Labor (the Department) and the Internal Revenue Service (IRS) use different tests for different laws, and states have their own.

The notices, in date order

Date	Federal Register notice	What the notice says it does
January 7, 2021	Final rule (the 2021 Rule)	Organizes the economic reality factors into regulation; effective March 8, 2021
March 4, 2021 and May 6, 2021	Delay Rule and Withdrawal Rule	Delays, then withdraws, the 2021 Rule
October 13, 2022	Proposed rule, 87 FR 62218	Proposes a revised analysis; comments due November 28, 2022
January 10, 2024	Final rule, 89 FR 1638	Replaces the analysis; effective March 11, 2024
February 27, 2026	Proposed rule, 91 FR 9932	Proposes to rescind the 2024 analysis; comments due April 28, 2026
April 23, 2026	Proposed rule, 91 FR 21878	Joint employer status; comments due June 22, 2026

2021: the first regulation of the factors

The Department's February 27, 2026 notice describes the January 7, 2021 final rule as the first time the longstanding economic reality factors were organized into regulatory guidance. It says the rule used five factors and named two of them as core factors: the nature and degree of control over the work, and the individual's opportunity for profit or loss. It says the other three were the amount of skill required, the degree of permanence of the relationship, and whether the work is part of an integrated unit of production. The same notice says the Department delayed the rule's effective date on March 4, 2021 and withdrew it on May 6, 2021, and that on March 14, 2022 a district court in the Eastern District of Texas vacated the delay and withdrawal.

2022 and 2024: a different analysis

The October 13, 2022 proposed rule said the Department was proposing to revise its analysis so that it fits court precedent and the Act's text and purpose better. The January 10, 2024 final rule said it replaced the Department's earlier analysis with one that fits court precedent and the Act's text and purpose better. The text of the 2024 rule, as printed in the Federal Register, sets out a totality-of-the-circumstances analysis. It names six factors:

opportunity for profit or loss depending on managerial skill;
investments by the worker and the potential employer;
degree of permanence of the work relationship;
nature and degree of control;
whether the work is an integral part of the potential employer's business;
skill and initiative.

It says no one factor or subset of factors is necessarily dispositive, that the weight given each may depend on the facts, and that the six are not exhaustive. The February 27, 2026 notice says the 2024 rule does not identify any core factors.

2025: the enforcement bulletin

The February 27, 2026 notice reports that on May 1, 2025 the Wage and Hour Division published Field Assistance Bulletin No. 2025-1. It quotes the bulletin as saying the Division "will no longer apply" the 2024 rule's analysis in investigations, and will instead enforce the Act under the July 2008 version of Fact Sheet #13 as informed by Opinion Letter FLSA2025-2, for matters where no back wages or penalties had been paid as of May 1, 2025. It also quotes the bulletin as saying that until further action, the 2024 rule remains in effect for private litigation and that nothing in the bulletin changes the rights of employees or the responsibilities of employers.

2026: the proposals

The February 27, 2026 proposed rule says the Department proposes to rescind the analysis in 29 CFR part 795 and replace it with the analysis it adopted in the January 2021 rule, with a few modifications. It says the notice proposes to apply that analysis also to the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act. It describes one substantive edit to the proposed section 795.105(b), a non-substantive edit to a paragraph of 795.105(d)(2), and small changes to the illustrative examples. Comments closed on April 28, 2026.

A separate proposal on April 23, 2026 deals with joint employer status. Its abstract says the Department has not given regulatory guidance on joint employer status under the Act since 2021, and proposes to clarify how to determine it in Part 791 of Title 29, where its joint employer rules sat before 2021. Comments closed on June 22, 2026. The Federal Register search used for this page, run on October 9, 2026, listed these two notices first, newest date first, among Wage and Hour Division documents with the phrase "employee or independent contractor".

The IRS test is separate

The IRS page on independent contractor or employee, last reviewed or updated on May 19, 2026, applies common-law rules for federal employment tax. It says evidence of the degree of control and independence falls into three categories: behavioral, financial, and type of relationship. It says there is no set number of factors that makes a worker an employee or a contractor, and no one factor stands alone. It describes Form SS-8, which either the business or the worker may file so that the IRS reviews the facts and officially determines the worker's status. The page says it may take at least six months to receive a determination.

For what the same office says about records and tax numbers, see the guide on registering as self-employed.