On February 26, 2026, the day the Department of Labor (DOL) released its new proposed rule on independent contractor (IC) status under the Fair Labor Standards Act (FLSA), we wrote a blog post on the rule, commenting that “the new rule, once finalized, would be ‘much ado about (almost) nothing.'” We noted that the proposed rule issued by the DOL under the second Trump administration was nearly identical to the final rule issued in early January 2021 by the DOL under the first Trump administration, which in turn had been rescinded by the DOL under the Biden administration. We pointed out that this 2026 rule will have little application to the large bulk of IC misclassification cases, which are brought under state law, and explained why it “will likely be disregarded by the federal courts.” We also noted that, while the proposed 2026 rule on IC status is drafted in a manner that tends to favor IC status, it would likely increase attention on IC issues and thereby prompt more class action misclassification lawsuits by plaintiffs’ attorneys, not less. If the DOL issues a final rule with the same language as the proposed rule, the rule will create uncertainty and misunderstanding about the law under the FLSA, and lawyers representing workers may seek to use some of the wording to challenge legitimate and lawful IC relationships. The proposed rule provided the public with 60 days to file comments to the proposed new rule. By the morning on the day before the end of the 60-day comment period, over 15,000 comments had been filed, including comments by the publisher of this blog (which are set forth verbatim below). Our comments urge the DOL to make meaningful improvements and add clarifications to the proposed 2026 rule when it is issued in final form.
COMMENTS BY RICHARD REIBSTEIN, PUBLISHER OF
INDEPENDENT CONTRACTOR MISCLASSIFICATION AND COMPLIANCE LEGAL BLOG
(as filed with U.S. Department of Labor on April 27, 2026)
The comments below are submitted in response to the “Notice of Proposed Rulemaking: Independent Contractor Status under the Fair Labor Standards Act,” 91 Fed. Reg. 9932 (Feb. 27, 2026). They are being submitted by Richard Reibstein, Esq., as the publisher of the legal blog “Independent Contractor Misclassification and Compliance.” Since its inception in 2010, the blog has provided readers with original content dedicated solely to this narrow but important area of the law, including posts with detailed comments on hundreds of FLSA cases involving the status of workers as independent contractors or employees. Reibstein also has published over 65 articles and videos on independent contractor compliance and misclassification matters and is regularly quoted on the subject in leading newspapers and business and legal media outlets.
Reibstein is a partner in the law firm of Troutman Pepper Locke LLP, where he co-chairs the firm’s independent contractor misclassification and compliance practice and represents businesses that seek to enhance their independent contractor compliance or need to defend against individual or class action lawsuits or administrative agency audits, investigations, or claims alleging independent contractor misclassification.
The eight comments below are attributable solely to Reibstein and are not intended to reflect the views of Troutman Pepper Locke LLP, other lawyers at the firm, or clients of the firm. All of the eight comments are listed in summary fashion below, followed by the reason for each comment.
SUMMARY OF COMMENTS
Comment 1. The first “core factor” should be drafted in a manner that focuses attention on control over the manner and means by which the work in question is performed. As drafted, the first core factor is ambiguous at best and may be misleading at worst, in a number of different ways.
Comment 2. The second of the two “core factors” focuses on the individual’s opportunity for profit or loss, but the text only mentions how the worker can generate “profit.” This core factor should give more than passing attention to “risk of loss.”
Comment 3. The first of the three “other factors” pertaining to skill overstates the importance of the factor. Skill can be a meaningful factor in determining independent contractor status, but often it is simply not relevant.
Comment 4. The proposed rule oversimplifies the second of three “other factors” pertaining to permanence of the working relationship.
Comment 5. The third and last “other factor,” which relates to the nature of the work in relation to the potential employer’s business, is unclear, vague, and uses words that are not terms of art and, as such, is not likely to provide meaningful guidance.
Comment 6. The proposed rule only lists five specific factors to be considered in determining independent contractor vs. employee status, yet notes that those factors are not exhaustive. It adds a provision that “Additional factors may be relevant in determining whether an individual is an employee or independent contractor for purposes of the FLSA,” but fails to list any examples. We have identified dozens of additional factors that the courts have regarded as relevant to a worker’s classification, and it would be useful to the public if the final rule listed some specific additional factors.
Comment 7. The reference to “training” in the proposed rule needs clarification that not all types of training weigh in favor of employee status.
Comment 8. Unless the Department makes the changes to the proposed rule that are urged above in these comments, the wording of the final rule will create uncertainty and misunderstanding about the law under the FLSA, and may be misused by those seeking to challenge otherwise lawful independent contractor arrangements.
REASON FOR EACH COMMENT
Comment 1. The first “core factor” should be drafted in a manner that focuses attention on control over the manner and means by which the work in question is performed. As drafted, the first core factor is ambiguous at best and may be misleading at worst, in a number of different ways.
Reason for this comment:
In proposed § 795.105 titled “Determining employee and independent contractor classification under the FLSA,” paragraph (d)(1)(i) currently provides: “(d) Economic reality factors — (1) Core factors — (i) The nature and degree of control over the work.” (Emphasis added.)
The courts uniformly have focused on control over the manner and means of performance; i.e., how the work is to be performed. It is a given that the party that engages the worker always controls “what” work is to be performed and often when and where the work is to be performed. An independent contractor plumber retained by a managing agent of an apartment complex to unclog a drain or install a new toilet, for example, has to be told “what” to do and of course, when and where to perform his/her task. Thus, control over what, where, and when are not necessarily meaningful to an independent contractor analysis. If the potential employer, on the other hand, controls how the work is done or retains the right to do so, that factor would favor employee status. Thus, the wording of the proposed rule regarding control by a potential employer “over the work” is not particularly meaningful and may lead to erroneous conclusions as to whether workers are employees or independent contractors.
If the language change suggested in the second comment above is adopted, the first “core factor” should be revised to read as follows: “Economic reality factors — (1) Core factors — (i) The nature and degree of control over the performance of the work, particularly on the manner and means of performance, i.e., how the work is to be performed.” (Emphasis added.)
This focus on control over the performance of the work, particularly how the work is to be performed, should also prompt the DOL to revise the language relating to this core factor of control to the extent it currently includes words that often have little or nothing to do with how the work is to be performed. For example, the proposed rule states in part:
“In contrast, this factor weighs in favor of the individual being an employee under the Act to the extent the potential employer, as opposed to the individual, exercises substantial control over key aspects of the performance of the work, such as by controlling the individual’s schedule or workload and/or by directly or indirectly requiring the individual to work exclusively for the potential employer. Requiring the individual to comply with specific legal obligations, satisfy health and safety standards, carry insurance, meet contractually agreed-upon deadlines or quality control standards, or satisfy other similar terms that are typical of contractual relationships between businesses (as opposed to employment relationships) does not constitute control that makes the individual more or less likely to be an employee under the Act.” (Emphasis added.)
While control over scheduling can in some situations weigh in favor of employee status, it has nothing to do with a worker’s classification where, for example, a business dictates that services be performed at times that are consistent with a customer’s service requirements or at times when the company is open for business, such as where a distribution warehouse of a company may only be open between 6 a.m. and 4 p.m.
Similarly, a company’s control over workload is equally common in many instances for both employees and independent contractors, such as where a business engages an independent distributor to service a geographic territory that has a certain number of stores to which the distributor mutually agrees to distribute products.
For these reasons, the words highlighted above dealing with “schedule or workload” should be deleted in the final rule. In addition the words relating to scheduling and workload (the latter also referred to by businesses as “service requirements”) should be added to the final sentence of proposed § 795.105(d)(1), as follows: “Requiring the individual to comply with specific legal obligations, satisfy health and safety standards, carry insurance, meet contractually agreed-upon service requirements, deadlines or quality control standards or meet customer requirements, or satisfy other similar terms that are typical of contractual relationships between businesses (as opposed to employment relationships) does not constitute control that makes the individual more or less likely to be an employee under the Act.” (Emphasis added.)
Comment 2. The second of the two “core factors” focuses on the individual’s opportunity for profit or loss, but the text only mentions how the worker can generate “profit.” This core factor should give more than passing attention to “risk of loss.”
Reason for this comment:
The second of the two “core factors” reads as follows in the proposed rule at § 795.105(d)(1)(ii):
“(ii) The individual’s opportunity for profit or loss. This factor weighs towards the individual being an independent contractor to the extent the individual has an opportunity to earn profits or incur losses based on his or her exercise of initiative (such as managerial skill or business acumen or judgment) or management of his or her investment in or capital expenditure on, for example, helpers or equipment or material to further his or her work. While the effects of the individual’s exercise of initiative and management of investment are both considered under this factor, the individual does not need to have an opportunity for profit or loss based on both for this factor to weigh towards the individual being an independent contractor. This factor weighs towards the individual being an employee to the extent the individual is unable to affect his or her earnings or is only able to do so by working more hours or faster.”
The above language focuses on opportunity for profit and fails to give any attention to or description of the types of losses that bear on the independent contractor status of the worker. Many factors can create risk of loss. A worker can be subject to loss if, for example, he or she has to re-do work that is not consistent with industry standards or does not meet a customer’s expectations; is potentially liable to the potential employer in the event his or her actions or inactions cause harm or legal expense to the potential employer; or fails to render services in a cost-efficient manner by not managing expenses or investing far too much time on activities that are unproductive.
Examples of these and other types of risk of loss should be identified in this “core factor” discussion so it is clear it does not focus predominantly on profit.
Comment 3. The first of the three “other factors” pertaining to skill overstates the importance of the factor. Skill can be a meaningful factor in determining independent contractor status, but often it is simply not relevant.
Reason for this comment:
The first of the three “other factors” in the proposed rule pertains to skill. Proposed § 795.105(d)(2)(i) provides as follows:
“Other factors—(i) The amount of skill required for the work. This factor weighs in favor of the individual being an independent contractor to the extent the work at issue requires specialized training or skill that the potential employer does not provide. This factor weighs in favor of the individual being an employee to the extent the work at issue requires no specialized training or skill and/or the individual is dependent upon the potential employer to equip him or her with any skills or training necessary to perform the job.”
This factor, as drafted, overstates the importance of skill. Highly skilled physicians can be either employees or independent contractors. The same is true with many others including lawyers, architects, and engineers. Likewise, a limousine or “black car” driver may have less skills than those in the so-called learned professions, but can (according to court decisions) be an independent contractor if, for example, he or she purchases a right to be offered engagements for private rides, exercises his or her contractual rights in a manner that turns a profit, and is not subject to any control by the potential employer over how the driver performs his or her work. Similarly, an individual that has an odd-jobs business, advertises his or her services, engages his own helpers, and works for many different clients each month should not be deemed an employee simply because he or she has little or no special skills or training.
Thus, the proposed rule as drafted gives too much emphasis on whether the position requires specialized training or skill. At a bare minimum, the final rule should at least indicate that this may be a relevant factor in some but certainly not all instances.
It is also suggested that the last sentence be changed by substituting the word “and” for the words “and/or” (i.e., deleting the “/or” from the sentence), as follows: “This factor weighs in favor of the individual being an employee to the extent the work at issue requires no specialized training or skill and the individual is dependent upon the potential employer to equip him or her with any skills or training necessary to perform the job.” (Emphasis added.) The use of the words “and/or,” which can mean “or,” would lead to a finding of employee status simply because the worker requires no specialized training or skill.
Comment 4. The proposed rule oversimplifies the second of three “other factors” pertaining to permanence of the working relationship.
Reason for this comment:
The second of the three “other factors” in the proposed rule states as follows at § 795.105(d)(2)(ii):
“(ii) The degree of permanence of the working relationship between the individual and the potential employer. This factor weighs in favor of the individual being an independent contractor to the extent the work relationship is by design definite in duration or sporadic, which may include regularly occurring fixed periods of work, although the seasonal nature of work by itself would not necessarily indicate independent contractor classification. This factor weighs in favor of the individual being an employee to the extent the work relationship is instead by design indefinite in duration or continuous.” (Emphasis added.)
This factor, as drafted, reads as if the only type of independent contractor engagement contemplated by the proposed rule is project-based. There are many other legitimate independent contractor relationships and a host of them are indefinite in duration. Some examples include an independent gardener who has provided service weekly to a homeowner for 20 years; an independent distributor who has chosen to operate his or her own business exclusively distributing a single company’s products; and an independent tutor who has provided frequent tutoring services to the same family’s children throughout their school years.
This “other factor” dealing with permanence should acknowledge that while permanence may indicate employee status, a worker’s decision to continue a profitable continuous relationship with the same service recipient does not by itself suggest employee status.
Comment 5. The third and last “other factor,” which relates to the nature of the work in relation to the potential employer’s business, is unclear, vague, and uses words that are not terms of art and, as such, is not likely to provide meaningful guidance.
Reason for this comment:
The language of the proposed rule relating to the third of the three “other factors” states at § 795.105(d)(2)(iii):
“(iii) Whether the work is part of an integrated unit of production. This factor weighs in favor of the individual being an independent contractor to the extent his or her work is segregable from the potential employer’s production process. This factor weighs in favor of the individual being an employee to the extent his or her work is a component of the potential employer’s integrated production process for a good or service. This factor is different from the concept of the importance or centrality of the individual’s work to the potential employer’s business.” (Emphasis added.)
This final “other factor” recasts what the DOL currently states in its Fact Sheet 13 as the “Extent to which the work performed is an integral part of the employer’s business.” In the proposed rule, this factor is now characterized as whether the work “is part of an integrated unit of production.” As the proposed rule states: “This factor is different from the concept of the importance or centrality of the individual’s work to the potential employer’s business.”
The meaning of the words in bold type in the third “other factor” are at best unclear. Production connotes manufacturing. Many businesses do not engage in “production” but rather provide services and, hence, do not have an “integrated unit of production.” This final other factor should be explained and the DOL should use terms of art or words that are commonly understood by the public, lawyers, and courts — words that include businesses that provide services.
It should also be noted that this final “other factor,” which in the past was referred to as whether the services provided by the worker are “integral to the principal’s business,” has historically been given little weight by the courts, especially because it has, at times, been viewed so expansively that it almost always weighs in favor of employee status. The classic misapplication of this factor is when it is limited to situations such as a landscaper that mows the lawn on a company’s suburban headquarters. The final rule should make clear that this factor weighs in favor of independent contractor status where a worker provides services that no one else at the company provides, such as where a company does not have employees that perform the work performed by the workers in question or do little more than refer workers to clients that are seeking that type of service.
Comment 6. The proposed rule only lists five specific factors to be considered in determining independent contractor vs. employee status, yet notes that those factors are not exhaustive. It adds a provision that “Additional factors may be relevant in determining whether an individual is an employee or independent contractor for purposes of the FLSA,” but fails to list any examples. We have identified dozens of additional factors that the courts have regarded as relevant to a worker’s classification, and it would be useful to the public if the final rule listed some specific additional factors.
Reason for this comment:
In proposed § 795.105, titled “Determining employee and independent contractor classification under the FLSA,” subsection (c) addresses how economic dependence is to be determined. It states in part:
“(c) Determining economic dependence. The economic reality factors in paragraph (d) of this section guide the determination of whether the relationship between an individual and a potential employer is one of economic dependence and therefore whether an individual is properly classified as an employee or independent contractor. These factors are not exhaustive, and no single factor is dispositive.” (Emphasis added.)
As noted above, subsection (d) then addresses two “core factors” (the nature and degree of control over the work, and the individual’s opportunity for profit or loss), and three “other factors” (the amount of skill required for the work, the degree of permanence of the working relationship, and whether the work is part of an integrated unit of production). § 795.105(d)(2)(iv) states:
(iv) Additional factors. Additional factors may be relevant in determining whether an individual is an employee or independent contractor for purposes of the FLSA, but only if the factors in some way indicate whether the individual is in business for him- or herself, as opposed to being economically dependent on the potential employer for work.
Nowhere does the proposed regulation specify any such additional factors pertinent to the determination of independent contractor vs. employee status. The courts have, however, considered dozens of other factors that bear on the question of a worker’s independence, including (to name just a few) whether the potential employer has the right to terminate the worker for any reason at any time; whether the worker has the right to accept or decline engagements; whether the parties are subject to an agreement indicating an intent to establish an independent contractor relationship; and whether the worker operates in the form of a corporate entity, including as a limited liability company.
The final rule should mention at least some of these or other additional factors the DOL deems relevant; otherwise, many pertinent factors bearing on a worker’s classification are far less likely to be considered.
Comment 7. The reference to “training” in the proposed rule needs clarification that not all types of training weigh in favor of employee status.
Reason for this comment:
The language of the proposed rule relating to the fourth of the eight examples states at § 795.115(b)(4)(i):
(i) Example. An individual worker works for a commercial construction company and is assigned to the crew that installs roofs on buildings. The company required no roofing skills when he started working for it, and he had no roofing skills when he started. Over his time working for the company, the individual has developed skills through on-the-job experience and training provided by the company.
(ii) Application. The work performed by this individual requires no specialized training or skill, and the individual relies on the construction company to provide any training necessary to perform the work. Accordingly, the skill factor weighs in favor of the individual being an employee. The fact that the individual has developed skills over his time at the company does not change that outcome because those skills resulted from on-the-job experience and training provided by the company.” (Emphasis added.)
The proposed example refers to “training” but fails to distinguish between training on the manner and means of performing services (i.e., how the work is to be performed) in contrast to training that has little or nothing to do with how the work is to be performed, such as training or instructions on electronic systems, programs, or platforms. While this particular example involving a construction worker connotes a type of training that is consistent with instructions as to how to perform the work, the explanation for this example should clarify that not all types of “training” weigh in favor of employee status. As an illustration, training a worker on the use of customer relationship management (CRM) software does not train him or her as to how to perform sales. Likewise, training as to how to use an app as well as instructions or training on software used by a particular company or industry is not training as to “how” to render services.
Comment 8. Unless the DOL makes the changes to the proposed rule that are urged above in these Comments, the wording of the final rule will create uncertainty and misunderstanding about the law under the FLSA, and may be misused by those seeking to challenge otherwise lawful independent contractor arrangements.
Reason for this comment:
Once this rule is published in final form, selected language in the rule will undoubtedly be used by workers and business as well as their lawyers to understand the law affecting independent contractor status under the FLSA and/or to advance their respective interests. Absent the changes pointed out in the comments above, the final rule’s treatment of (a) control, (b) risk of loss, (c) skill, (d) permanence, (e) integrated production process, and (f) training will likely cause uncertainty about these seven key matters. In addition, the wording in the final rule may also be misused by those seeking to challenge otherwise legitimate and lawful independent contractor relationships under the FLSA.
Respectfully submitted by:
/s/ Richard Reibstein
April 27, 2026