Federal Workplace Policy Shifts: DOL Proposes New Independent Contractor Classification Rule and EEOC Withdraws Harassment Guidance

The U.S. Equal Employment Opportunity Commission and the U.S. Department of Labor recently announced separate actions that could affect employer compliance strategies.  The U.S. Department of Labor (“DOL”) has proposed a new rule redefining the standard for independent contractor classification under federal wage and hour laws, and the U.S. Equal Employment Opportunity Commission (“EEOC”) recently rescinded its 2024 workplace harassment enforcement guidance.  Although neither action alters the underlying statutes, both reflect meaningful changes in federal agency interpretation and enforcement posture.

DOL Proposes New Independent Contractor Classification Standard

On February 26, 2026, the U.S. Department of Labor issued a Notice of Proposed Rulemaking, proposing to rescind the 2024 independent contractor rule and replace it with a revised classification framework under the Fair Labor Standards Act (“FLSA”).  The proposal signals a return to an “economic reality” analysis focused on whether a worker is economically dependent on a hiring entity for work or instead operates an independent business.

The proposed rule would eliminate the 2024 six-factor totality-of-the-circumstances test and instead emphasize two primary considerations: the nature and degree of control exercised by the hiring entity and the worker’s opportunity for profit or loss based on managerial skill or investment.  Additional factors, such as the permanence of the relationship, the skill required for the work, and the extent to which the services are integral to the business, would remain relevant but secondary to the central inquiry of economic dependence.  Notably, the DOL proposes applying this unified framework across the FLSA, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act, thereby promoting consistency across federal labor standards.

Next Steps for Employers

The DOL began accepting public comments on the proposal on February 27, 2026, with the comment period open for 60 days and closing on April 28, 2026.  The agency will review these submissions to evaluate the potential impact of the rule on workers and businesses before determining whether to revise and finalize the proposal. 

While the rule is not yet effective, employers should anticipate that the DOL may change how it scrutinizes worker classifications if it finalizes the proposal, and may wish to consider taking the following steps during the rulemaking period:

• Review existing independent contractor relationships to assess how control and profit/loss opportunities function in practice.
• Ensure that written agreements accurately reflect the actual working relationship and are not based solely on contractual labels.
• Monitor state and local worker-classification standards, including jurisdictions that apply stricter “ABC” tests or other employee-friendly frameworks.

Please note that this change in the federal test does not impact the various state tests for assessing independent contractor classifications.

EEOC Rescinds 2024 Harassment Enforcement Guidance

The EEOC has also voted to withdraw its 2024 Enforcement Guidance on Harassment in the Workplace in its entirety.  The rescission removes a comprehensive interpretive document that many employers rely upon for policy drafting, training, and investigative frameworks.  Importantly, the withdrawal does not change the governing law under Title VII or other federal anti-discrimination statutes.  Harassment based on protected characteristics remains unlawful, and employers remain subject to investigation and enforcement by the agency, as well as private litigation.

The 2024 guidance had consolidated prior EEOC materials and incorporated more recent legal developments, including Supreme Court precedent and evolving interpretations of workplace harassment in modern work environments.  The document also addressed issues such as virtual workplace conduct, social media interactions affecting the workplace, and harassment based on sexual orientation or gender identity following Bostock v. Clayton County.  Notably, portions of the guidance became the subject of litigation in 2025, when a federal district court in Texas concluded that certain provisions, particularly those relating to gender identity, exceeded the EEOC’s statutory authority.  In response to the litigation and ongoing policy debates surrounding the guidance, the Commission ultimately voted to withdraw the document in its entirety.

The rescission does not alter the legal standards courts apply when evaluating harassment claims.  Title VII and other federal employment statutes continue to prohibit harassment that creates a hostile work environment or results in tangible employment action based on protected characteristics.  Courts will continue to rely on established case law interpreting these statutes, and the EEOC retains its authority to investigate charges of discrimination, pursue administrative enforcement actions, and litigate harassment claims in federal court.

Next Steps for Employers

For employers, the primary practical effect of the rescission is the removal of a centralized EEOC interpretive resource rather than a change in substantive legal obligations.  Employers should therefore continue to maintain comprehensive anti-harassment policies, ensure accessible complaint-reporting procedures, and conduct prompt, well-documented investigations of alleged misconduct.  In addition, employers operating across multiple jurisdictions should remain mindful that many state and local laws impose broader anti-harassment protections and training requirements than federal law, and those obligations remain unaffected by the EEOC’s action.

Conclusion

These developments reflect shifting federal agency priorities rather than changes to the underlying statutory landscape.  The EEOC’s rescission of its 2024 harassment guidance removes a centralized interpretive document but does not diminish employers’ obligations to prevent and address workplace harassment.  At the same time, the DOL’s proposed independent contractor rule may reshape federal classification analysis if adopted in final form.  Employers should use this period of transition to reinforce compliance programs, review workforce classification practices, and remain attentive to further regulatory updates throughout 2026.  For assistance, please contact one of Honigman’s Employment and Labor Attorneys here.