The Department of Labor proposed a 2026 rule to clarify employee versus independent contractor status under federal wage-and-hour law. The proposal would rescind the 2024 rule and use an “economic reality” test focused on whether a worker is in business for themselves or economically dependent on the company for work. This affects gig work, trucking, home services, health care, creative work, and small businesses. The public question is how to prevent misclassification without eliminating legitimate independent work. The rule should not let companies call someone a contractor just to skip wages and protections. But it also should not crush people who genuinely run their own work.
How should federal labor rules decide when workers are employees instead of independent contractors?