Last week, the Trump Administration published its 2025 Spring Regulatory Agenda, in which administrative agencies provide information on proposed regulatory and deregulatory actions. The Regulatory Agenda provides the public a roadmap of these agencies’ priorities over the short- and long-term and allows employers to track potential changes to the current law impacting their workplaces. As has been clear from the beginning of the Trump Administration, deregulation is a big priority, and the Regulatory Agenda reflects it, identifying several regulations for rescission among the various agencies.
Within the Department of Labor, the Wage and Hour Division (“WHD”) described five regulatory/deregulatory actions it intends to actively pursue. Of particular interest are the proposed rulemakings addressing independent contractors and joint employer status.
Intent to Rescind Independent Contractor Rule
In January 2024, the DOL promulgated a final rule on how to analyze if a worker is an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”). In effect, the Rule rescinded the prior rule passed during the first Trump Administration in 2021, which focused the independent contractor analysis on two core factors, and reinstated the totality of the circumstances approach in evaluating each of the relevant factors in the economic realities test, with no one factor being assigned a predetermined weight. The 2024 Rule also returned to a six-factor analysis, adding some additional considerations to some of these factors, and evaluation of reserved but unexercised control over workers.
In response to promulgation of the 2024 Rule, several lawsuits challenging its legality were filed and, in the context of those lawsuits, the DOL asserted that it would be reconsidering the 2024 Rule, including whether to rescind the regulation. In a related move, on May 1, 2025, WHD issued a field assistance bulletin (“FAB”) in which it explained that WHD would no longer apply the framework described in the 2024 Rule to analyze whether a worker should be classified as an independent contractor or an employee. In the same FAB, the WHD explained that it would rely on previous guidance to conduct enforcement efforts going forward.
Thus, it was not a surprise when WHD announced its intent to rescind the 2024 Rule in the Spring Regulatory Agenda through a proposed rule, providing a projected timeline of later this month. The WHD also expressed that it is still considering how it will proceed related to independent contractor classification under the FLSA; i.e., whether to replace the rule it intends to rescind.
In the meantime, employers can look to the guidance referenced in the FAB to understand the standards on which WHD intends to rely in its enforcement efforts – namely Fact Sheet #13 (July 2008) and Opinion Letter FLSA 2019-6 (now available as Opinion Letter FLSA2025-2).
Rulemaking on Joint Employer Status
One of the current regulatory efforts of the WHD is issuance of a rule on joint employer liability under the FLSA. During the first Trump Administration, the DOL promulgated a final rule revising and updating its regulations interpreting joint employer status. The Rule, promulgated in January 2020, hinged on an assessment of four factors related to which company exercised power to (1) hire and fire; (2) supervise and schedule; (3) set pay; and (4) maintain employment records. Per the DOL, none of the factors were determinative of joint employer status and the weight applied to each factor depended on the circumstances.
After passage of this rule, multiple states sued to block the rule from taking effect, accusing the DOL of exposing workers to wage theft by narrowing its definition of joint employment further than permitted by the FLSA. A judge in the U.S. District Court for the Southern District of New York struck down the Rule for several reasons in September 2020, including that it was arbitrary and capricious, holding that the DOL failed to justify its departure from its prior interpretations of joint employer status, did not account for costs to workers, and was too narrow in requiring a company actually exercise control instead of simply having the right to exercise control. The Rule was ultimately rescinded during the Biden Administration through rulemaking, but the DOL did not promulgate a replacement rule at that time.
Now the Trump Administration has signaled its intent to take another bite at the apple and “adopt regulations that would guide WHD’s enforcement of FLSA joint employer liability” and “help promote greater uniformity among court[s].” The projected timing for promulgation of such a rule is December 2025. Presumably the WHD will consider the prior legal ruling in determining the substantive content of a new proposed rule interpreting joint employer status, but it is likely we will see a joint employer status rule similar to that promulgated during the first Trump Administration.
Rule on White Collar Exemptions Placed on Long Term Actions List
Notably, the WHD has not proposed a regulatory or deregulatory action related to a rule interpreting the FLSA’s White Collar Exemptions, despite that being a focus during the previous Trump Administration and the Biden Administration. For context, the White Collar Exemptions under the FLSA except certain workers – namely those considered executive, administrative, professional, outside sales, and computer employees – from the law’s minimum wage and overtime requirements. To determine whether an employee meets one of the exemptions, an employer must evaluate whether they perform the required duties AND are paid a salary at or above the threshold set for these exemptions.
The Administration’s position on White Collar Exemptions is not unexpected considering that the current threshold salary level set for application of the White Collar Exemptions is the same as the level established during the first Trump Administration. During the first Trump Administration, the WHD promulgated a final rule setting the threshold salary level for inclusion in one of the White Collar Exemptions at $35,568 a year or $684 per week. The WHD promulgated this rule after the prior rule passed during the Obama Administration, which set the salary threshold level significantly higher, was struck down by a federal court. The court found that the DOL exceeded its authority by establishing a salary level that rendered the other part of the analysis, the specific duties performed by the employee, meaningless.
The salary level set by the Trump Administration remained in place until the DOL under President Biden again attempted to substantially raise the salary level threshold to $55,068 per year or $1,059 per week in 2024. As happened to the Obama Administration’s White Collar Exemption Rule, the 2024 Final Rule faced legal challenge after it was promulgated and a court similarly struck it down as beyond the authority of the DOL. As a result, the salary threshold level reverted back to that set by the first Trump Administration.
The Trump Administration has not completely given up on the possibility of promulgating another rule addressing White Collar Exemptions, moving the action to its Long Term Actions List, but it is certainly not a priority. The DOL stated that it “is currently reviewing the 2024 rule and determining how to proceed.”
In addition to the actions discussed above, the WHD has identified other rules for rescission – Nondisplacement of Qualified Workers Under Service Contracts and Increasing the Minimum Wage for Federal Contractors, both of which are being rescinded in order to effectuate Executive Orders signed earlier this year.
We will continue tracking these and other regulatory and deregulatory actions and certainly provide updates as to their status and impact.
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