DOL Plans New Rules on Overtime, Independent Contractors and More

Author: Michael Cardman, Brightmine Senior Legal Editor

September 4, 2025

New regulations are in the works that could raise the salary threshold for overtime-exempt employees, loosen independent contractor classification and clarify the standard for joint employment.

Those are among the notable additions to the US Department of Labor (DOL) semiannual regulatory agenda that were announced today. 

"This regulatory agenda reflects our steadfast commitment to restoring economic opportunity by fostering innovation and reducing unnecessary burdens on employers," Deputy Secretary of Labor Keith Sonderling said. "By modernizing outdated rules and prioritizing clarity and efficiency, we're building a more agile, worker-centered labor policy framework that fuels economic growth and prosperity."

In addition to the nearly 150 regulations listed on its agenda, the DOL also has pending regulations addressing workplace heat exposure, the minimum wage tip credit, child labor and domestic workers.

It remains to be seen whether any of these plans will reach fruition. Many regulations penciled in on the DOL agenda never reach the finish line of the long regulatory process. Some never get formally proposed. Others get rescinded by future administrations. Still others get overturned by the courts - an outcome that is increasingly likely after the Supreme Court in 2024 gave courts more power to decide whether an agency has lawfully interpreted a statute.

Nevertheless, the DOL's regulatory agenda provides a useful roadmap for what could be in store for employers in the months and years ahead.

Overtime Rule

During the first Trump administration, the DOL issued regulations that raised the minimum salary for most overtime-exempt employees under the Fair Labor Standards Act (FLSA) to its current level of $684 per week (or $35,568 per year).

Under the Biden administration, the DOL in 2024 promulgated new regulations that temporarily increased the minimum weekly salary to $844. Those regulations also would have increased the minimum weekly salary to $1,128 in 2025 and then adjusted the minimum weekly salary for inflation every three years starting in 2027; however, they were struck down by a federal court before those changes could take effect, and the minimum weekly salary was returned to $684.

Now the DOL has plans to issue a new rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, to "determine whether certain salaried employees are exempt from FLSA minimum wage and overtime requirements." (Note: This new overtime rule does not appear on the regulatory agenda; rather, it is listed in a DOL press release.)

One likely scenario is that the new rule would increase the minimum weekly salary above its current level of $684 but not as high as the Biden-era levels of $844 or $1,128. The DOL had not responded to a request for comment as of the time of publication.

Independent Contractors

With its new agenda item Employee or Independent Contractor Classification Under the Fair Labor Standards Act, the DOL plans to repeal the current FLSA independent contractor rule enacted last year under the Biden administration and consider "how it will proceed with respect to independent contractor classification."

One possibility is that the DOL will restore the independent contractor rule that the Trump administration put forward in 2020, or some variation thereof.

In the meantime, the DOL has directed its personnel to apply a more business-friendly 2008 fact sheet and 2019 opinion letter when investigating misclassification cases.

In preparation for a new rule, employers may wish to revisit the 2020 rule to see if any workers currently classified as employees might be reclassified as independent contractors under a more relaxed FLSA standard; of course, employers also should consider any relevant independent contractor tests under common law, the federal tax code, other federal laws and miscellaneous state laws.

The rule's webpage lists September as a target date, but the DOL seldom meets these targets.

Joint Employment

Another new agenda item, Joint Employer Status Under the Fair Labor Standards Act, is intended to guide the DOL's enforcement of FLSA joint employer liability and to "help promote greater uniformity among court decisions nationwide."

The FLSA statute does not define joint employment - generally considered to mean when an employee performs work for an employer that simultaneously benefits another individual or entity. If two or more employers jointly employ an employee, the hours worked by the employee for all of the joint employers during the workweek are lumped together and considered as one employment when calculating whether overtime pay is due. For example, if the employee works 20 hours for one joint employer and 30 hours for another joint employer, 10 hours of overtime must be paid to the employee. 

In the decades since the FLSA was enacted in 1938, the courts have developed a legal framework for determining joint employment status known as the economic realities test.

Under the Obama administration, the DOL aimed its enforcement efforts at businesses that use franchising, subcontractors or third-party intermediaries such as temporary employment agencies or labor brokers - claiming that they should be considered joint employers in many cases and held jointly liable for any violations of the FLSA.

In 2020, under the Trump administration, the DOL issued a new joint employment rule with a simple four-factor test for determining joint employer status. Many business groups had welcomed the Trump-era rule, saying it provided "much-needed clarity" around the often-ambiguous criteria for joint employment.

But in 2021, under the Biden administration, the DOL repealed the 2020 rule. The DOL has not yet issued a replacement, leaving a regulatory hole that has been filled by the courts.

The DOL plans to issue a new rule in December.