In a major positive step, the Trump administration released a new proposed rule to protect independent contractors nationwide.
On February 27, the Department of Labor Wage and Hour Division announced the Trump administration’s 2026 Independent Contractor Rule. As I reported previously here, the Trump administration planned to rescind the 2021 Biden-era Independent Contractor Rule, and had signaled to federal courts that it would step back from all pending litigation, and to businesses that it would not enforce the parameters of this rule.
The summary of the Trump 2026 IC rule confirms that the Biden 2021 IC rule will be rescinded and replaced.
“The Department plans to rescind the current 29 CFR part 795 analysis and replace it with the 2021 final rule analysis, with minor modifications, applying it across Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA).”
By undoing the complex and concerning Biden-era regulation, this proposed rule will provide clarity and certainty to self-employed, freelancers, and gig workers and the businesses that depend on them nationwide. As we have often written, independent contracting is a major issue for women who are able to stay in the workforce because of the flexibility this model of work provides.
The Trump 2026 IC rule follows the framework of the Trump 2021 IC rule with modifications to the FLSA, FMLA, and MSPA.
For example, for the FLSA, it narrows previously broad language concerning what constitutes an “employee,” and more accurately defines that independent contractors are not employees. It then applies this language across concurrent regulatory frameworks.
The administration seeks to conform the regulations used by the courts and businesses to define employment and labor concerns so that they work in concert, not against each other. So, across all the regulations, the 2026 IC rule removes other employment tests, such as the “ABC Test” and nullifies the six-factor “economic reality” test from the 2024 IC rule.
Labor Secretary Lori Chavez-DeRemer said in the DOL press release announcing the new rule:
“The tens of millions of Americans who work as independent contractors are helping drive the Golden Age of the American economy. The department’s proposed rule seeks to protect these workers’ entrepreneurial spirit and simplify compliance for American job creators navigating a modern workplace, all while maintaining robust protections for employees under the Fair Labor Standards Act.”
Wage and Hour Administrator Andrew Rogers also affirmed this streamlining with the goal of simplicity and ease of compliance.
“The rule we are proposing today is not only based on long-standing legal principles used in federal courts across the country but also is aimed at ensuring that workers and employers know how to apply those principles predictably,” Rogers said.
The 2026 Trump IC rule aligns with its 2021 counterpart in using their own “economic reality” test to determine whether an individual is in business for themselves or economically reliant on an employer. The 2026 IC rule provides greater clarity under the FLSA that independent contractors are not employees. It also expands on the concept of “economic dependence.” Contrasting the dependence a traditional employee has on an employer for work versus an individual who maintains a separate business or exhibits the nature and character of an entrepreneur.
The following factors guide, but do not limit this assessment:
- Degree of control of the individual;
- Permanence of the relationship;
- Integration of the individual’s work within the business where services are rendered;
- The individual’s level of skill;
- The individual’s investment in the facilities for which they perform work;
- The individuals’ opportunity for profit or loss.
The 2026 IC rule also pulls the “Severability Clause” from its 2021 counterpart. This clause ensures that if any provision within the rule is invalidated, the rest of the rule will remain in effect.
According to the 2026 Trump IC rule, 6.37 million small businesses could benefit through cost savings thanks to the cleaner standards in the determination of employee and independent contractor status.
My colleague, Patrice Onwuka, CEO Director, said in Independent Women’s press release, following the rules announcement:
“We look forward to amplifying the voices of those in support of this rule and working with the Department of Labor to see this rule enacted.”
The 2026 Trump Independent Contractor Rule will undergo a mandatory 60-day comment period, and the Department of Labor encourages interested and affected parties to utilize the U.S. mail or the Federal eRulemaking Portal to communicate their thoughts and opinions, pro or con. Comments will be closed on April 28, 2026, at 11:59 p.m.