The federal Fair Labor Standards Act (FLSA) does many things, including setting pay standards for employees of covered employers. The Biden administration sought to expand the law to cover more people who may be considered independent (or gig) workers, but the Trump administration reversed course and halted this effort.

The Kingston Law Group helps employees protect and enforce their rights under state and federal laws. If you have any questions or concerns about an issue with your employer, call us at 609-683-7400 so we can discuss the situation and how we may be able to help.

What is the FLSA?

The FLSA is a federal law that establishes a national minimum wage, recordkeeping, overtime pay, and youth employment standards for private employees and those in federal, state, and local governments. For these standards to apply, the person in question must be an employee under the statute.

Someone enforcing the FLSA must consider the facts of each situation. As interpreted by federal courts, the way to determine if one is an employee covered by the FLSA or an independent contractor who is not is to evaluate the following factors:

• How much the services rendered are an integral part of the principal’s business
• How permanent is the relationship between the parties
• How much the alleged contractor invested in facilities and equipment
• The nature and degree of the principal’s control
• The alleged contractor’s exposure to profit and loss
• How much initiative, judgment, or foresight in competition with others is required for the claimed independent contractor’s success
• The degree of independent business operation and organization

What’s irrelevant to deciding whether the person’s an employee includes the following:

• Where the work is performed
• Whether or not there’s a formal employment contract
• Whether a state or local government licenses the worker

Some things that affect a worker’s status include the following:

• Employee: Control over the worker to the point they can’t work for another business, informally or through an explicit agreement
• Employee: A company requires a worker to agree to a fixed term of work, not work for a competitor after that time ends, or face restrictions or sanctions for leaving a job to seek other opportunities
• Employee: If a business makes investments into equipment and tools and provides them to a worker, they may rely on the business to supply them to perform their services, making it harder for them to seek other opportunities, and they will be more dependent on the business for an income
• Either: Whether the worker has the skills needed to find and manage different work projects that independent contractors typically handle, or task-specific, specialized skills that would normally be part of the employer’s operations. The person is more likely to be an employee if they rely on the employer to give them the necessary skills to perform a job
• Independent contractor: The opportunities for profit or loss typically arise when the worker receives additional compensation for using initiative, judgment, or foresight, not just greater efficiency. They can renegotiate compensation during the working relationship, or risk money invested in the job or its outcome
• Employee: The person’s services are integrated into a business and part of its primary purpose

There’s no “hard and fast” rule that may definitively decide you’re legally an employee misclassified as an independent contractor and being denied wages and benefits that you’re owed. It’s more of a checklist that may cut either way, depending on the facts.

What was the Biden Administration’s Position on Defining an Employee?

A Biden-era rule covering how a person would be determined as an employee, as opposed to being misclassified as an independent contractor under the FLSA, included a focus on whether, as an “economic reality,” a worker is dependent on a possible employer for work, not income (which would make them an employee), or is self-employed and in business for themself (making them an independent contractor).

The 2024 rule imposed what some interpreted as a more worker-friendly standard for independent contractor classification than the guidance created by the first Trump administration. The rule faced legal challenges from business groups. They claimed the rule needlessly increased costs, reduced employer flexibility, and created legal uncertainty. Though these plaintiffs tried, no court issued an order blocking this rule.

What Did the Trump Administration Do About the Rule?

The federal Department of Labor (which enforces the FLSA) issued Field Assistance Bulletin 2025-1 last year. It instructed its staff to stop applying the 2024 rule’s analysis when deciding whether someone is an independent contractor or employee under the FLSA. Instead, if an employer had not paid back wages or civil money penalties as of May 1, 2025, staff were told to analyze the person’s employment status under the framework listed in the DOL’s Fact Sheet #13, published in 2008, as interpreted by the agency’s Opinion Letter FLSA 2019-6.

The standard, as stated in Fact Sheet #13, is more employer-friendly than the Biden administration’s 2024 rule, and there’s no substantial change for workers and employers for several reasons, including the following:

• Many states’ wage and hour laws’ employment tests differ from federal law, including New Jersey’s (which is more worker-friendly).
• The DOL’s guidance was described as a temporary measure, but months have passed, and they haven’t offered anything new.
• The DOL under President Trump’s first administration created its own rule on this issue, but his second administration isn’t going back to that guidance. It’s reaching back to one created when Barack Obama was President

At the federal level, given the Trump administration’s actions, this area of law is in flux. Though there are some general rules of thumb, this is a very fact-specific legal topic, so it’s difficult to give you valid advice without a thorough conversation. If you have questions or concerns about being paid and how much, schedule a consultation with us.

Has Your Employer Treated You Illegally in Some Way?

If you believe your employer is violating your rights because it’s not treating and paying you like an employee? If so, we will listen to your facts, explain the law, and suggest right and reasonable approaches for relief.

Kingston Law Group provides workers with compassionate counsel and tough advocacy. We are ready to help you, your loved ones, and your friends. Call us at +1-609-683-7400 or contact us online to schedule a near-term initial consultation at a reduced hourly rate. Call or write us today. You’ll be glad you did.