Trump restores his 2021 independent contractor rule

For the third time in five years, the rules on who is considered an independent contractor have changed. What effect will this have on owner-operator truck drivers?

On Friday, Feb. 27, the Department of Labor began the rulemaking process to revise rules clarifying who is an independent contractor versus an employee. The new rule replaces a 2024 rule with one nearly identical to a short-lived 2021 rule.

A widespread problem across the trucking industry is the misclassification of truck drivers as employees. Numerous lawsuits have been filed against motor carriers accused of hiring drivers as independent contractors, despite treating them as employees, to undercut wages.

For the most part, both rules kept the status quo intact for owner-operator truck drivers. However, there was one issue with the 2021 rule that could allow motor carriers to require speed limiters and other devices on independent contractors’ trucks. That provision is not included in the new rule.

2021 rule vs. 2024 rule

Part of the issue was a lack of clarity over who is considered an independent contractor.

Before 2021, there were no official rules in the books. Disputes were mostly settled by relying on case law and Department of Labor guidance.

DOL guidance has used some version of an “economic reality” test. In 2008, that guidance included seven factors to consider when determining employment status:

Extent to which the services rendered are an integral part of the principal’s business
Permanency of the relationship
Amount of the alleged contractor’s investment in facilities and equipment
Nature and degree of control by the principal
Alleged contractor’s opportunities for profit and loss
Amount of initiative, judgment or foresight in open market competition with others required for the success of the claimed independent contractor
Degree of independent business organization and operation

In the final days of his first term in 2021, Donald Trump’s DOL published a final rule clarifying who is considered an independent contractor. That rule looked at five factors:

Nature and degree of control
Opportunity for profit or loss based on initiative, investment or both
Skill required for the work
Permanence of the work relationship
Whether the work is part of an integrated unit of production

The first two factors were considered “core factors.” If the core factors clearly tilted in favor of an independent contractor, then the determination was made, no further questions. If the core factors were more ambiguous, the remaining three factors would guide the employment status decision.

Trump’s 2021 rule was largely seen as maintaining the status quo for owner-operator truck drivers.

However, one example of how to apply the rule suggested that motor carriers could require speed limiters on independent contractors’ trucks to stay compliant with federal and state regulations. That opened the door to carriers requiring a suite of technology on owner-operators’ trucks.

None of that mattered. When Joe Biden took office, the 2021 rule was struck down before it even took effect. In 2024, Biden replaced the independent contractor with a new one.

The 2024 rule included mostly the same factors. Instead of designating core factors, the Biden-era rule looked at the totality of the factors. All factors had equal weight. None was more determinative than the others.

Although some believed it would solve systemic issues with misclassification, others argued the ambiguous economic reality test would force employers to reclassify independent contractors as employees.

Several lawsuits challenged the 2024 rule, including two filed by trucking companies. Those lawsuits have been unsuccessful, with several sitting in an appeals court. With the DOL’s latest announcement, they may be unnecessary.

2026 independent contractor rule

The DOL’s proposed rule is mostly a resurrection of the 2021 rule.

All of the economic reality test factors from 2021 are in the 2026 rule, including the core factors. There are some minor tweaks to definitions and examples.

One significant change for truck drivers is amending the example related to owner-operator truckers. While the 2021 rule used speed limiters as an example of motor carriers allowed to impose requirements for regulatory compliance, the 2026 rule does not.

Instead, the new independent contractor rule replaces the speed limiter scenario with a drug and alcohol compliance example. Specifically, a motor carrier can require that an owner-operator undergo drug and alcohol testing to stay compliant with regulations.

The Owner-Operator Independent Drivers Association applauded the changes.

“We welcome the Trump Administration’s proposal protecting independent contractors and rejecting any backdoor attempt to mandate dangerous speed limiter devices on truckers,” said Collin Long, OOIDA senior director of government affairs. “Today’s proposal largely mirrors the 2021 rule, ensuring owner-operators can continue working under their existing arrangements with carriers without fear of being reclassified as employees. We applaud the Department of Labor for correcting a problematic speed limiter loophole in the previous rule that would have enabled carriers to micromanage their independent contractors. We look forward to reviewing all the details of the rule and ensuring independent truckers aren’t controlled like employees or forced to give up a business model that works for them.”