Labor

The Labor Department Just Freed Contractors—Again. Congress Still Needs To Act.

The government's new rule reverses a Biden-era anti-contracting directive and returns to a more contractor-friendly posture. But will this tug of war ever end?

C. Jarrett Dieterle | 4.4.2026 7:00 AM

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The debate over independent contractors is taking off again. In recent weeks, the Department of Labor issued its long-awaited independent contractor rule. The new directive reverses a Biden-era anti-contractor rule and thereby returns federal law to a more contractor-friendly posture. But as this federal regulatory seesaw plays out, state governments—and even Congress—provide the best hope for long-term change.

The debate over how to classify independent contractors dates far back in time. A 1947 U.S. Supreme Court case, Rutherford Food Corp. v. McComb, grappled with the issue of whether slaughterhouse workers were employees or contractors, and in the nearly 80 years since, the debate has never fully resolved. But in 2018, it received renewed attention in the aftermath of a decision by the California Supreme Court that created a new stringent three-part test that made it extremely difficult for workers to be classified as contractors.

This state court decision was eventually expanded through the now-notorious A.B. 5 law in California, which was a thinly-veiled attempt to prevent gig companies from classifying their........

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