DOL Reinstates Independent Contractor Opinion Letter: Key Implications for Gig Economy Employers

Overview

In a significant policy reversal, the U.S. Department of Labor (DOL) has reinstated a 2019 opinion letter favoring independent contractor classification for gig workers. The reinstated guidance, now reissued as Opinion Letter FLSA2025-2, provides a more business-friendly interpretation of independent contractor status under the Fair Labor Standards Act (FLSA), particularly for companies operating digital platforms and marketplace models.

Background

Following a leadership change within the DOL’s Wage and Hour Division, the agency formally withdrew the 2024 independent contractor rule issued under the Biden administration and revived the Trump-era guidance originally issued in 2019. The opinion letter specifically analyzes workers engaged through a Virtual Marketplace Company (VMC), such as rideshare or delivery platforms, and concludes these workers are properly classified as independent contractors.

Key Findings from the Opinion Letter

The DOL applied the longstanding six-factor “economic realities” test, reaching the following conclusions:

Implications for Employers

While opinion letters are not legally binding, they reflect how the DOL intends to approach enforcement under the FLSA. This latest opinion letter signals a return to a more flexible interpretation that may benefit gig economy companies and others utilizing independent contractors.

Cautionary Notes

Next Steps for Employers

For questions or assistance with worker classification issues, please contact Chaim Book at cbook@booklawllp.com or Sheryl Galler at sgaller@booklawllp.com.