What Freelancers Need to Know about the Latest Independent Contractor Rule

In February, the Trump administration proposed a new  independent contractor rule. If you’ve been paying attention, the rule may look familiar – that’s because it is almost the same as the rule adopted in 2021 during the first Trump administration.

The proposed rule, officially titled “Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act,” applies an economic reality test to determine “whether a worker is in business for himself or herself as an independent contractor or is an employee economically dependent on an employer for work.”

As proposed, the rule focuses on two factors: control and opportunity for profit. It highlights several other less important “guideposts” to help with the analysis. Those include the worker’s skill, role permanence, and whether their contributions are “part of an integrated unit of production.”

The example included in the proposed rule is a factory position, but it also refers to being an integral part of a company’s business (read the entire 146-page rule here). It provides eight examples that illustrate how the economic reality factors might be analyzed to determine if someone is an independent contractor. Example seven, which you can see in this three-page summary of examples in the proposal, describes a part-time newspaper editor, and example eight references a freelance journalist. 

A Brief Timeline of Federal Independent Contractor Rules

If your head is spinning from the back and forth over different independent contractor rules that have been proposed or finalized since 2021, you’re not alone. Here’s a brief timeline to help you keep it straight:

• Pre-2021: No official independent contractor rule existed prior to 2021. That year, during President Trump’s first term, the U.S. Department of Labor provided informal guidance for worker classification, but mostly left it up to the courts to determine on a case-by-case basis whether someone was an employee based on prior case law. That determination could differ from state to state.
• 2021: The Labor Department finalized the rule just before Trump left office, and it went into effect a few months later. The Biden administration ultimately rescinded that rule and proposed a different one.
• 2024: In March, the Biden administration’s rule became effective.
• 2025: In May, the Trump administration said it would not enforce the Biden rule.
• 2026: In February, the Trump administration introduced its proposed rule.

How the Proposed Rule is Different From Past Rules

The Biden administration rule uses a six factor “totality-of-the-circumstances test” to determine if someone is an independent contractor, but does not share how to weigh the six (but really seven) factors:

1. Opportunity for profit or loss depending on managerial skill
2. Investments by the worker and the potential employer
3. Degree of permanence of the work relationship
4. Nature and degree of control
5. Extent to which the work performed is an integral part of the potential employer’s business
6. Skill and initiative
7. Additional factors

Many have argued that the Biden administration rule is not constitutional, and is too vague to apply and interpret. In fact, my lawyers made that argument when I was a plaintiff in Warren vs. Department of Labor, which I filed with my three Fight for Freelancer co-founders. We sued the government seeking an injunction to stop the rule from taking effect, arguing that the rule failed to provide clear guidance to employers. Our suit was one of at least five opposing the rule (another, Littman vs. DOL, was brought by two other writer/editors). 

I believe that the current rule does a better job at clarifying who is or isn’t an employee. Many argue that the Biden administration’s rule had a chilling effect on independent contractor-client relationships and made companies less willing to work with independent contractors. One of that administration’s goals for passing the rule was to convert more independent contractors to employee positions, ostensibly granting them the protections and benefits that employee status may offer. However, legislation and rules like it have been shown not to convert independent contractor roles into W2 employee positions.

Share Your View During the Public Comment Period

The Labor Department is accepting public comments about the proposed rule through April 28. I highly recommend that you submit your thoughts—it does not take a lot of time. Submit comments online. The site offers guidance on how to submit a comment, including points to cover in your argument for or against the rule. You can read my short comment as an example. If you don’t want to read the entire 146-page document, you can search for legal analysis posts with easy-to-understand explanations of the proposed rule.

To learn more and potentially share your thoughts, consider attending the Small Business Administration Office of Advocacy’s roundtable on the rule on Thursday, April 9 from 1 to 3 p.m. Eastern time. The online event includes a briefing on the proposed rule by a Labor Department representative, and 80 minutes for independent contractors and other small businesses to share how it could affect them, positively or negatively. Comments shared at the roundtable will not be entered into the record, so if you want to formally submit yours, you must do it through the government website. Registration to attend the roundtable is required. If the event is similar to the last one I attended, you can request to speak once you dial in.

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Debbie Abrams Kaplan is a journalism and content marketing writer and editor who focuses on health and medical, business, and supply chain. Since beginning to fight for independent contractor issues in 2019, she has become an expert in that as well. Debbie is a co-founder and former leader of Fight for Freelancers NJ and Fight for Freelancers USA, and is a long-time ASJA member. For the past few years, she was ASJA’s Advocacy Chair. Learn more about her work at Kaplanink.com.