On October 13, 2022, the U.S. Department of Labor (Department) published a Notice of Proposed Rulemaking (NPRM) proposing to revise the Department’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act. Prior to the publication of the NPRM, the Department held forums to hear diverse perspectives from those who are interested in employee or independent contractor classification. The NPRM proposes to rescind the 2021 Independent Contractor Rule (“2021 IC Rule”) that was published on January 7, 2021.

The initial deadline for interested parties to submit comments on the NPRM was November 28, 2022. On October 26, 2022, the Department published a notice in the Federal Register lengthening the comment period an additional 15 days to December 13, 2022. The full text of the NPRM, as well as the procedures for submitting comments, can be found at Federalregister.gov.

Regulatory History

  • On September 25, 2020, the Department published a NPRM addressing the distinction between employees and independent contractors under the FLSA. See 85 FR 60600. On January 7, 2021, the Department published a final rule in the Federal Register, with an effective date of March 8, 2021. See 86 FR 1168 (2021 IC Rule).
  • On February 5, 2021, the Department published a proposal to delay the 2021 IC Rule’s effective date until May 7, 2021, 60 days after the original effective date. See 86 FR 8326. On March 4, 2021, after considering the comments submitted in response to that proposal, the Department published in the Federal Register a final rule to delay the effective date of the 2021 IC Rule to May 7, 2021, as proposed (Delay Rule). See 86 FR 12535.
  • On March 12, 2021, the Department published a NPRM proposing to withdraw the 2021 IC Rule. See 86 FR 14027. On May 6, 2021, after considering the comments submitted in response to the NPRM, the Department published in the Federal Register a final rule to withdraw the 2021 IC Rule. See 86 FR 24303 (Withdrawal Rule). The Withdrawal Rule was effective immediately upon its publication.
  • On March 14, 2022, a district court in the Eastern District of Texas vacated the Department’s Delay Rule and Withdrawal Rule. The district court further stated that the 2021 IC Rule became effective as of March 8, 2021, the rule’s original effective date, and remains in effect.
  • On May 13, 2022, the Department filed a notice of appeal in this matter. In response to a request by the Department, the Fifth Circuit Court of Appeals is currently holding the appeal in abeyance.