WASHINGTON, D.C. — The U.S. Department of Labor (DOL) is preparing to roll back the 2024 Biden-era independent contractor classification rule, according to its latest regulatory agenda. The agency has not yet detailed what framework it will adopt in its place under the Fair Labor Standards Act (FLSA), but stakeholders across the construction industry are closely watching the move.
The rule is a cornerstone in determining whether a worker should be treated as an independent contractor or as a full-time employee eligible for wages, overtime, and benefits. In construction, this distinction often decides whether someone is recognized as a subcontractor or directly employed by a general contractor on a jobsite.
The announcement marks the latest in a string of reversals. The 2024 Biden rule itself replaced a 2021 Trump-era standard, and since its implementation in March 2024, it has faced at least five separate legal challenges. The DOL stopped enforcing the Biden rule in May of this year.
Under the current framework, the DOL applies a “totality of the circumstances” test, weighing six main factors:
This replaced the Trump-era model, which placed heavier emphasis on workers’ control and profit-loss potential.
For many in construction, the Biden-era rule created more uncertainty. Employer groups such as the Associated General Contractors of America (AGC) and Associated Builders and Contractors (ABC) have long opposed it, and they welcomed news of its repeal.
“We had anticipated this move and expect a future rule to make compliance and the lines for determining status clearer for employers,” said Brian Turmail, AGC vice president of public affairs and workforce. “We would welcome a rule that offers a clear and consistent federal clarification of status and preserves the legitimate use of independent contractors in the construction industry.”
ABC echoed those sentiments. Kristin Swearingen, vice president of government affairs for ABC, said: “ABC is pleased to see that the DOL appears to be moving forward in its effort to revisit the independent contractor rule as it indicated to the court it would. Many construction employers depend on legitimate independent contractors to provide specialized skills, entrepreneurial opportunities and stability during fluctuations of work common to the industry.”
The regulatory agenda also signals that a replacement rule is expected to be proposed later this month. Still, the path toward finalization is likely to be slow. The Biden rule, for instance, was first unveiled in 2022 and did not take effect until March 2024.
That suggests any new rule will take years to implement — and depending on the political landscape in Washington, could face yet another shift in direction.
For now, construction employers and workers alike remain in limbo as the DOL weighs how to redraw the lines defining independent contractor status, a debate that directly impacts wages, benefits, and workforce flexibility across the industry.
Originally reported by Zachary Phillips in Construction Dive.
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