DOL Updates
DOL Proposes New-Ish Independent Contractor Rule
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EFFECTIVE TBD |
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Discussion
On February 26, 2026, the U.S. Department of Labor (DOL) issued a new proposed rule redefining how workers are classified as employees or independent contractors under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA). If adopted, this rule would replace the current six-factor totality of the circumstances test with a framework that is similar to the DOL’s 2021 rule.
The 2021 rule prioritized two core factors: (1) the degree of control the worker has over the performance of their work, and (2) the extent to which the worker has genuine entrepreneurial opportunity. Under this approach, individuals who set their own schedules, select their own clients, market their own services, and make business decisions that influence profit or loss are more likely to be considered independent contractors. Alternatively, workers who are subject to significant direction, lack meaningful business independence, or can only increase earnings by working more hours are more likely to be treated as employees.
Although the proposed rule preserves several familiar secondary factors, such as specialized skill, permanence of the relationship, and whether the work is integrated into the employer’s operations, these considerations would generally play a lesser role when the two primary factors point clearly toward either employee or contractor status.
Importantly, the DOL has indicated that the proposed standard would apply not only to worker classification under the FLSA, but also the FMLA and MSAWPA, creating consistency across these federal laws that rely on similar definitions of the term “employee.” Practically, this means that misclassification risks could extend beyond wage and hour issues, and into employee leave entitlement and reinstatement obligations.
The proposed rule is subject to a comment period that began on February 27, 2026, and will remain open until April 28, 2026. Until the rule is finalized, employers should continue following existing case law and the current totality of the circumstances framework when evaluating whether a worker is an employee or an independent contractor.
Action Items
- Review independent contractor classifications and agreements with legal counsel.
- Continue to monitor future developments.
DOL Clarifies Status of Federal Contractor Minimum Wage
On February 9, 2026, the DOL published a notice in the Federal Register clarifying the status of federal contractor minimum wage requirements following conflicting executive actions. By way of background, President Obama’s Executive Order 13658 (2014) originally established the federal contractor minimum wage, which was later increased by President Biden’s Executive Order 14026 (2021). President Trump revoked the Biden‑era EO in March 2025 but left open whether the Obama‑era EO remained in effect. The DOL has now clarified that EO 13658 continues to apply only to contracts awarded between January 1, 2015, and January 29, 2022, that have not been renewed or extended since, implicitly concluding that it no longer applies to contracts awarded or renewed after January 29, 2022. The agency also announced updated wage rates under EO 13658: $13.65 per hour for covered workers and $9.55 for tipped workers, effective May 11, 2026.
DOL Launches AI Literacy Framework for Training Workers
On February 13, 2026, the DOL announced its AI Literacy Framework, outlining the baseline skills workers should have to use AI responsibly and effectively in the workplace. While the framework does not create new legal obligations, it reflects the federal government’s ongoing focus on preparing workers for an AI‑driven economy, following the Trump Administration’s July 2025 AI Action Plan. The DOL emphasizes that every worker, regardless of industry, should have foundational AI literacy skills. The framework identifies five core competencies that employees should develop: understanding basic AI principles; recognizing practical AI use cases; learning how to direct and prompt AI tools effectively; evaluating AI outputs with human judgment; and using AI responsibly with respect to data protection and workplace policies. In addition, DOL outlines seven employer training principles, encouraging organizations to focus on hands‑on learning, job‑specific context, human‑AI complementarity, removing digital literacy barriers, ongoing skill development, leadership readiness, and flexible, update‑ready training programs. Although the guidance is non‑binding, it signals DOL’s expectations for how employers should integrate AI literacy into workforce development.
DOL Launches Modern Open Data Portal for Labor Data
On February 18, 2026, the DOL announced its new open data portal designed to increase transparency and improve access to federal labor information. The portal replaces the agency’s older data page, which was officially shut down on February 23, 2026. According to the DOL, the new platform provides more efficient access to workforce‑related datasets and aligns with the agency’s broader January 2026 rollout of new compliance‑assistance tools aimed at supporting employer compliance. The updated portal expands beyond the five‑agency enforcement datasets previously available and now includes broader data such as weekly national unemployment insurance claims, federal contractor veteran employment data, and county‑level childcare price information.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase