Regulation Watch: Positive Independent Contractor Rule to Land Soon

There’s good news for our nation’s freelancers coming from Washington. A long-awaited new federal rule protecting independent contracting is on the way.

A year ago, Independent Women wrote about the newly inaugurated Trump administration pausing a legal challenge to the United States Department of Labor’s (DOL) 2024 Biden Final Independent Contractor rule.

On Wednesday, the U.S. Court of Appeals for the Fifth Circuit granted a motion by the U.S. Department of Justice (DOJ) to halt oral argument in a legal challenge (Frisard’s Transp., LLC v. United States DOL) to the U.S. Department of Labor’s (DOL) final independent contracting rule. This move gives the incoming leadership at the DOL a chance to review the case and determine its next steps, instead of moving ahead with oral arguments, which had been scheduled for Feb. 5, 2025.

This is important because the Biden-era rule would have led to devastating losses for independent contractors such as freelancers, self-employed professionals, and gig workers, and the businesses that contract their work:

The rule was introduced in January 2024 and finalized in May. It established a six-factor test to determine whether an individual should be classified as an independent contractor or an employee. This rule has introduced great confusion and uncertainty for independent workers and businesses that depend on the independent contractor model. The Biden-era rule replaced a 2021 rule finalized by the previous Trump administration, the latter of which employed a simpler test that was deemed more favorable to independent contractors and businesses.

Since that announcement in January 2025, the Trump administration has stepped back from enforcing this Biden rule.

In May 2025, the Trump administration formally announced that the rule would no longer be enforced. DOL Wage and Hour division field staff were instructed against the enforcement of the Biden-era rule, opting instead to apply a 2008 fact sheet as well as a 2019 opinion letter to matters involving back pay and civil monetary penalties.

The Trump administration still kept its powder dry on the fate of the Biden final rule, but all signs indicated that this rule would ultimately be rescinded.

As the employment law firm Littler wrote:

The U.S. Department of Labor (DOL) announced through the Trump administration’s unified agenda its intention to rescind its own 2024 final rule, which provided an analysis for determining independent contractor status under the Fair Labor Standards Act (FLSA) (‘2024 IC Rule’).

Citing to five separate legal challenges to the 2024 IC Rule and its intention to ‘reduce unnecessary burdens on employers and employees,’ the Trump DOL aims to retool its independent contractor rule.

Deregulation means simplicity for both businesses and independent professionals, especially women professionals and small business owners. As our CEO director, Patrice Onwuka, said in a congressional testimony:

Sometimes, government policy, even when well-intentioned, erects barriers to opportunity for individuals and contributes to the labor supply challenges that employers face. It’s incumbent upon policymakers to work in a bipartisan manner to dismantle those barriers if we want to ensure economic growth for businesses and prosperity for all.

The Trump administration’s rescission of the Biden-era rule is part of dismantling these barriers. The replacement of a draconian rule that forced a convoluted six-pronged totality of circumstances with a much cleaner economic reality factors that prioritize the nature and degree of an independent professional’s control over their work and our opportunity for profit or loss based upon our own initiative and investment above others.

From reports, the latest Trump independent contractor rule will closely mirror the 2021 Trump independent contractor rule, which was instituted at the end of President Trump’s first term and which the Biden administration rescinded and replaced.

On January 7, 2026, the Department of Labor filed this latest Trump independent contractor rule with the Office of Management and Budget (OMB). OMB can take up to 90 days for its review. 

The good news: The timely institution of this new rule in the midst of the second year of the Trump administration ensures the benefits can be fully embraced by both independent professionals and small businesses, the implementation can allow for adjustments, and the repercussions to the corporations and small businesses can be properly addressed.