Department of Labor Considering Changes to Independent Contractor Test

The U.S. Department of Labor (DOL) is currently considering changes to how worker status is evaluated under federal labor laws, an issue that could be of interest to many auction professionals who work with independent contractors.

In February 2026, the Department proposed rescinding the worker classification rule adopted in 2024 and replacing it with an earlier framework first published in 2021, with several modifications. The proposal would apply to the Fair Labor Standards Act (FLSA) as well as related provisions of the Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

What Is Worker Classification?

Worker classification refers to whether an individual is considered an employee or an independent contractor under federal law. The distinction can affect wage and hour requirements, overtime eligibility, leave protections, and other employment-related obligations.

The current regulation utilizes a six-factor analysis that considers the totality of the relationship between a worker and a business. The Department's proposal would place greater emphasis on two primary considerations:

• The degree of control the worker exercises over their work; and

• The worker's opportunity to earn profit or incur loss based on their own business decisions.

According to the Department, these factors would serve as the "core" considerations in determining whether a worker is operating as an independent business or is economically dependent on an employer.

Why Is the Department Considering a Change?

The Department has stated that the current rule may create uncertainty and could be interpreted as setting a higher threshold for independent contractor status than existing law requires. The proposed framework is intended to align more closely with the statutory language of the Fair Labor Standards Act and judicial precedent.

Supporters of the proposal argue that it provides clearer guidance and better reflects the realities of many independent business relationships. Others have expressed concerns about how changes could impact worker protections and employment rights.

Where Does the Proposal Stand?

The public comment period closed on April 28, 2026. According to the Department's docket, more than 16,000 comments were submitted by businesses, trade associations, labor organizations, elected officials, and individual stakeholders.

The Department is currently reviewing those comments. At this time:

• No final rule has been issued.

• No implementation timeline has been announced.

• Existing regulations remain in effect.

The proposal also does not appear to preempt stricter state worker-classification laws. As a result, state-specific requirements would continue to apply where they are more restrictive than federal standards.

What Does This Mean for Auction Professionals?

At this stage, no action is required. The proposal remains under review, and no changes have been finalized.

Because independent contractor relationships are common across many industries, including the auction profession, NAA will continue monitoring developments and provide updates as additional information becomes available.

Members with questions regarding worker classification should consult qualified legal counsel or employment professionals familiar with the laws in their state and the specific facts of their business operations.

NAA will continue to monitor this issue and share updates as the Department of Labor considers next steps.