Recently, two federal agencies announced rule changes that should lessen the risk of worker misclassification. On February 26, 2026, the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB) took major steps to roll back Biden-era employment and labor regulations and largely reinstate worker classification rules promulgated in the first Trump administration.

NLRB Announces New Joint Employer Rule

On February 26^, 2026, the National Labor Relations Board (NLRB) announced that it was officially returning to a pro-business joint-employer standard, replacing the Biden Administration’s joint-employer rule.

Background

The Biden Administration’s 2023 joint employer rule significantly expanded when employers would be considered joint employers under the National Labor Relations Act (NLRA). Instead of focusing on the actual exercise of control an employer exerted over a worker, the 2023 rule treated employers as joint employers based on indirect or unexercised control. NFIB opposed the 2023 joint employer standard. A legal challenge was filed against the standard, and in 2024, a federal court declared it unlawful.

The New Joint Employer Standard

Under the new standard, an employer will be considered a joint employer only if it “shares or codetermines the employees’ essential terms and conditions of employment” with another employer. This determination looks to whether an employer “posses[es] and exercise[s] such substantial direct and immediate control over one or more essential terms or conditions” of employment. The “essential terms or conditions” of employment include wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction. For each term and condition of employment, the inquiry focuses on an employer’s actual control and exercise of that control.

This new standard will offer greater clarity and predictability for employers. To better understand the new standard, see NLRB New Joint Employer Standard.

DOL Proposes New Independent Contractor Rule

On February 26, 2026, the U.S. Department of Labor (DOL) announced a proposed rule clarifying the independent contractor test under the Fair Labor Standards Act (FLSA), the federal wage-and-hour law. DOL’s proposal benefits both employers and independent contractors by enhancing clarity and flexibility, while lowering the risk of misclassification and financial penalties.

Background

In 2024, the Biden Administration revised the independent contractor analysis used to determine liability under the FLSA. NFIB vigorously opposed the Biden Administration’s attempt to restrict small businesses’ use of independent contractors. We sued to stop the 2024 independent contractor rule from taking effect.

DOL’s New Independent Contractor Rule

DOL’s proposed rule, if finalized, would refocus the independent contractor analysis on whether a worker is economically dependent on the employer. Employers should evaluate five factors in this analysis, with the first two being the “core,” or most important, factors.

1. The Nature and Degree of Control Over the Work
   • Independent contractor – If the individual exercises substantial control over key aspects of performance, such as work scheduling, project selection, and ability to work for other employers.
   • Employee – If the employer controls the worker’s schedule, projects, or ability to work for others.

 

2. Individual’s Opportunity for Profit or Loss
   • Independent Contractor – If the individual can earn profits or incur losses based on their own exercise of initiative, like managerial skill or business acumen, or management of their own business capital.
   • Employee – If the individual cannot affect their earnings or can only do so by working faster or more hours.

 

3. Amount of Skill Required
   • Independent Contractor – If work requires specialized training or skill that employer does not provide.
   • Employee – If no specialized skill or training is required, or worker is dependent on employer to provide training necessary for the job.

 

4. Degree of Permanence of Working Relationship Between Individual and Employer
   • Independent Contractor – If the work is definite in duration or sporadic.
   • Employee – If the work is indefinite in duration or continuous.

 

5. Whether the Work is Part of an Integrated Unit of Production
   • Independent Contractor – If the worker’s contribution is segregable from the employer’s production process.
   • Employee – If the worker’s contribution is a component of the production process for the employer’s good or service.

 
For the first time, DOL’s proposed rule also seeks to apply the same classification analysis to other federal laws beyond the FLSA, such as the Family and Medical Leave Act (FMLA).

For more information, you can read the proposed rule or download NFIB’s Guide to Independent Contractors.

If you have questions on these classification updates, contact the NFIB Legal Center at info@nfib.org.

March 9, 2026