Compliance & Legal8 min read
The US Contractor Test Is Shifting Again — Where DOL’s 2026 Proposals Leave Remote Hiring
The US Department of Labor proposed new independent-contractor and joint-employer rules in 2026, swinging the federal test back toward the 2021 standard. A neutral explainer of what’s proposed, what’s still governed by the 2024 rule, and why state ABC tests still bind.
Published July 2026 · RSW Editorial
Frequently Asked Questions
Did the US change the independent-contractor rule in 2026?
Not yet. The Department of Labor proposed a new Independent Contractor rule (published 27 February 2026) that would restore the employer-friendlier 2021 two-core-factor "economic reality" test, and a separate Joint Employer rule (proposed 22 April 2026). But both are proposals — as of mid-2026 neither is final, and the 2024 rule still governs federal classification.
Which worker-classification rule applies right now?
The 2024 rule. It weighs six factors as a totality of the circumstances with no single factor decisive, and it remains operative for private FLSA litigation even though the DOL has signaled it will not enforce it. The 2026 proposals would change this once finalized, but until then the 2024 standard is the governing federal test.
What is the difference between the 2021, 2024, and 2026 tests?
The 2021 rule gave controlling weight to two core factors — control over the work and the worker’s opportunity for profit or loss. The 2024 rule replaced that with a six-factor totality-of-the-circumstances analysis with no dominant factor. The 2026 proposal would return toward the 2021 two-core-factor framework. The underlying question — control and economic dependence — is common to all three.
Does the DOL rule override California’s ABC test?
No. Federal classification law does not change state tests. California’s ABC test — under which a worker is presumed an employee unless the hiring entity proves all three conditions — is independent and stricter than the federal economic-reality test. A business compliant under a restored federal 2021-style test could still be misclassifying under California or another ABC-test state.
What is the joint-employer rule about?
It sets when two businesses are jointly responsible as employers of the same worker. The 2026 proposal distinguishes "vertical" joint employment (one entity engages workers directly employed by another, such as a client using a staffing agency) from "horizontal" (related employers jointly controlling the same worker). It matters most for staffing firms, EOR providers, and contracted-labor chains, which face wage-and-hour exposure for workers they do not directly employ.
What should employers do while the rules are pending?
Do not reclassify workers on the strength of a proposal — the 2024 rule governs today. Classify on the real facts of each relationship (control and economic dependence), map which states your contractors work in and apply the stricter of federal and state law, and keep the agencies straight: the DOL/FLSA rules are separate from the NLRB’s labor-law rules and the IRS’s tax classification.