For an industry that has watched this issue go back and forth for years, the independent contractor proposal marks the latest swing in the regulatory pendulum.
For trucking companies that rely on owner-operators, the federal government may once again be shifting the ground rules.
The U.S. Department of Labor has proposed rescinding its 2024 independent contractor rule implemented under the Biden administration and largely restoring the standard adopted in early 2021 — a move supporters say would bring more clarity to how owner-operators are classified under federal wage and hour law.
At issue is how the department determines whether a worker is economically dependent on a company — and therefore an employee — or truly in business for themselves as an independent contractor.
For an industry that has watched this issue swing back and forth for years, the proposal marks the latest turn in a regulatory pendulum spanning three administrations.
What the Proposal Would Do
The 2024 rule, which took effect in March 2024, adopted a six-factor “totality of the circumstances” test. No single factor was intended to carry more weight than another. Regulators were directed to look at the entire relationship between the worker and the company.
Industry groups argued that approach created uncertainty and made it harder for motor carriers to meet the standard when using independent contractors as owner-operators.
Although the 2024 rule technically remains in effect, the current administration announced last year that it was reconsidering the regulation and that it would not enforce the Biden-era rule.
The new proposal would formally rescind the 2024 rule and return largely to the 2021 framework. That structure still relies on the long-standing “economic reality” test, but places greater emphasis on two core questions:
- The nature and degree of control over the work.
- The worker’s opportunity for profit or loss based on initiative and investment.
If those two factors point clearly in the same direction, they generally carry the most weight under the new proposal.
Other considerations — such as skill, permanence of the relationship, and whether the work is part of an integrated operation — are still considered, but not given the same weight.
“The rule we are proposing today is not only based on long-standing legal principles used in federal courts across the country but also is aimed at ensuring that workers and employers know how to apply those principles predictably,” said Wage and Hour Division Administrator Andrew Rogers in a news release.
How the Two Core Factors Apply to Trucking
For trucking, those two core factors go directly to the structure of the owner-operator model.
Independent contractors typically own or lease their equipment, manage operating expenses, and make business decisions that affect profitability.
At the same time, owner-operators working for trucking fleets must comply with federal safety regulations, customer standards, and operational policies. This has raised questions about what constitutes employment-level control.
The proposal states that compliance with legal and safety requirements — such as drug-and-alcohol testing regulations — should not automatically be treated as evidence of employee status.
A return to the 2021 regulation “is intended to provide more predictability and certainty regarding worker status,” attorneys at Scopelitis Garvin Light Hanson & Feary wrote in a client alert.
The firm noted that the proposal would provide more clarity for transportation providers, particularly regarding adherence to safety and regulatory requirements not being weighed as indicators of employee status.
ATA Welcomes Proposal
The American Trucking Associations praised the move, saying it would protect independent truckers and restore clarity to the law.
“Following years of advocacy led by ATA, the Trump Administration’s proposal represents a significant step forward to defend the livelihoods of the hundreds of thousands of truckers who choose to work as independent contractors,” said ATA President & CEO Chris Spear in a release.
ATA said the trucking industry has relied on independent contractors for decades and argued that the 2024 rule created confusion and increased litigation risk.
The association said it will support efforts to finalize the proposal and will continue urging Congress to pass legislation codifying the 2021 independent contractor definition into federal law.
A Long-Running Debate
The independent contractor issue has been a recurring flashpoint in trucking, particularly as states such as California adopted stricter “ABC test” standards under laws like AB 5.
While federal rules do not necessarily override state classification laws, the Department of Labor’s approach influences enforcement priorities nationwide.
The 2024 rule has also faced multiple legal challenges, including lawsuits brought by trucking companies. Several of those cases are currently on hold as the department moves forward with the new proposal.
The proposed rule includes a 60-day public comment period, with comments due April 28. After reviewing feedback, the department could issue a final rule later this year.
As with prior versions, any final regulation is likely to face legal scrutiny.
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