The Department of Labor Moves to Pause Litigation as It Reconsiders Worker Rule

On April 7, in Frisard’s Transportation v. U.S. Department of Labor, a status report filed by the government noted that the DOL informed counsel on April 3 of its intent to reconsider the 2024 Worker Classification Rule. This action may include issuing a notice of proposed rulemaking to rescind the rule altogether. As a result, this case — and likely others — will be held in abeyance, meaning temporarily paused or suspended, during the reconsideration process.

At the core of this case is a rule that determines how workers are classified under the Fair Labor Standards Act (FLSA). Since wage and hour protections apply only to employees—not independent contractors—making proper classification essential. Because the FLSA doesn’t define “independent contractor,” courts and the Department of Labor’s Wage and Hour Division (WHD) use a multi-factor test. The 2024 Worker Classification Rule replaced the 2021 rule, reinstating a totality-of-the-circumstances approach. This new approach means classification depends on various factors, including the worker’s opportunity for profit or loss, investments made, the permanence of the relationship, the employer’s control, whether the work is integral to the business, the worker’s skill and initiative, and other relevant considerations.

In just the past five years, regulations regarding worker classification have shifted repeatedly. SHRM raised concerns over this regulatory whiplash during recent testimony by Paige Boughan, M.S., SHRM-SCP, before the House Subcommittee on Workforce Protections, in which she emphasized the need for a legislative solution that clearly defines the factors used in worker classification decisions under the FLSA.

While the 2024 rule technically remains in effect, the DOL has requested that one case be held in abeyance and has indicated plans to request similar pauses in other pending lawsuits in this legal arena. Although DOL is unlikely to enforce the rule during this period, it has not explicitly stated that enforcement will cease while litigation is on hold.