Biden-Era Independent Contractor Rule Challenged by the DOL

Labor Department Halts Independent Contractor Rule Enforcement

Biden-Era Rule Paused Following Legal Challenge

The U.S. Department of Labor (DOL) has paused the enforcement of its 2024 independent contractor rule. This comes after a federal court in Texas issued a preliminary injunction in the case State of Texas v. U.S. Department of Labor. The court order blocks the rule from being used in Texas. In response, the DOL is stopping its use across the country in enforcement actions.

On May 1, 2025, the DOL’s Wage and Hour Division (WHD) released Field Assistance Bulletin No. 2024-2. This bulletin tells WHD investigators not to apply the 2024 rule when deciding if a worker is an employee or an independent contractor. Instead, investigators will now use the 2021 rule, which was issued during the Trump Administration.

Key Changes for Trucking and Other Industries

This change is important for the trucking industry. Many truck drivers operate as independent contractors. They own their trucks and choose their own routes and schedules. This business model has been used in trucking for decades.

Under the Trump-era 2021 rule, investigators will look mainly at two key factors. First, they will consider how much control the worker has over their work. Second, they will look at whether the worker can make a profit or suffer a loss based on their own decisions and investments. These two factors help determine if a person is truly running their own business.

The 2024 rule, created under the Biden Administration, used a broader test. Critics said it was unclear and could cause more lawsuits. Some also said it would make it harder for people to work independently.

Trucking Industry Reaction to Independent Contractor Decision

The American Trucking Associations (ATA) welcomed the DOL’s decision to stop enforcing the 2024 rule. ATA President & CEO Chris Spear said, “We welcome today’s announcement that the Department will no longer use the Biden-era independent contractor rule to determine whether an individual is an employee or contractor under the Fair Labor Standards Act.”

He added, “This is a crucial first step toward returning to the common-sense standard set forth in President Trump’s first term, which protected the freedom of individuals to choose work arrangements that best suit their needs and fulfill their ambitions.”

ATA has long opposed the 2024 rule. The organization argued that the rule created confusion and threatened the business model used by thousands of truck drivers. ATA also supported legal efforts to overturn the rule. This includes a lawsuit filed by a number of groups and a legislative effort led by Representative Kevin Kiley of California and Senator Bill Cassidy of Louisiana.

In addition, ATA shared personal stories from truck drivers impacted by the rule. The organization’s Women In Motion Council compiled a booklet of testimonials from women truckers. These stories were used in a congressional hearing to show how the rule could affect independent contractors.

Legal Background and Federal Response

The legal case that led to the DOL’s action was filed by the State of Texas in March 2024. Texas argued that the 2024 rule would create burdens for employers and workers alike. The court agreed and issued an order stopping the rule from being enforced in that state.

Rather than enforce different rules in different parts of the country, the DOL decided to pause use of the 2024 rule nationwide. This pause will stay in effect until the legal situation becomes clearer.

What Comes Next for Independent Contractor Classification

The Department of Labor said it will continue to monitor the legal process. It may issue more updates in the future. For now, WHD investigators will use the 2021 rule as their guide.

The question of how to classify independent contractors remains unsettled. However, for the trucking industry and others that rely on independent workers, this latest move offers temporary clarity. Many will be watching closely to see if the 2021 rule is fully restored or if more changes lie ahead.