Labor & Employment

Beltway Buzz, May 16, 2025

The Beltway Buzz™ is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what’s happening in Washington, D.C., could impact your business.

Republican Legislators Push Ahead With Agenda. This week, the U.S. House of Representatives’ Committee on Ways and Means advanced—on a party-line 26–19 vote—a tax reform package that included Republicans’ top fiscal priorities. The bill makes permanent many provisions of the 2017 Tax Cuts and Jobs Act and includes other measures, such as an expansion of the child tax credit. Of particular interest to the Buzz, the bill also provides temporary (2025 through 2028 tax years) above-the-line deductions for qualified tips and overtime premium pay. There is still quite a long way to go for this bill, and changes are expected, especially considering that some Republicans in the U.S. Senate have already expressed some reservations about the proposal.
OMB Approves EEO-1 Changes. On May 12, 2025, the Office of Management and Budget (OMB) approved changes to the EEO-1 form that removes employers’ option to disclose non-binary employee data. The U.S. Equal Employment Opportunity Commission (EEOC) requested the changes pursuant to President Trump’s Executive Order 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” The proposed instruction booklet filed with OMB indicates that the 2024 EEO-1 filing period would begin on May 20, 2025. There has been no word yet from the EEOC in light of OMB’s approval of the change. Kiosha H. Dickey and James A. Patton, Jr. have the details.
PBGC Nominee on the Move. On May 15, 2025, the U.S. Senate Committee on Health, Education, Labor and Pensions voted to advance the nomination of Janet Dhillon to serve as the director of the Pension Benefit Guaranty Corporation (PBGC). Created by the Employee Retirement Income Security Act of 1974, PBGC protects workers’ retirement benefits through its single-employer and multiemployer insurance programs. Dhillon previously served as chair of the EEOC. Her nomination now awaits a vote on the Senate floor.
House Committee Examines OSHA. On May 15, 2025, the House Committee on Education and the Workforce’s Subcommittee on Workforce Protections held a hearing entitled “Reclaiming OSHA’s Mission: Ensuring Safety Without Overreach.” The hearing focused on the Occupational Safety and Health Administration’s (OSHA) regulatory and enforcement agenda during the Biden administration and “explore[d] common-sense solutions that can return OSHA to fulfilling its purpose of advancing workplace safety.” Legislators and witnesses discussed OSHA’s proposed heat standard, the final “walkaround rule,” and the Severe Violator Enforcement Program. With regard to OSHA’s heat proposal, Republicans and their witnesses criticized its one-size-fits-all proscriptions—arguments that are likely to be made at OSHA’s public hearing on the proposal in June.
Disparate Impact Follow-Up. President Trump’s recent executive order directing federal agencies to limit the use of disparate-impact theories of liability is having a ripple effect at implementing agencies and among stakeholders. Here is the latest fallout:

Department of Energy Rescinds Regulations. The U.S. Department of Energy—not an agency that we normally deal with at the Buzz—took steps this week to rescind forty-seven regulations. Included is a direct-to-final rule, entitled, “Rescinding Regulations Related to Nondiscrimination in Federally Assisted Programs or Activities (General Provisions).” With regard to a regulatory provision concerning nondiscrimination in federally assisted programs or activities, the direct-to-final rule states the following:

Furthermore, absent a specific, identified, instance of intentional discrimination, statistical information indicating that certain protected groups are underrepresented in some occupations or professions does not obligate any FFA [federal financial assistance] recipient to take remedial or affirmative action under this part. To the contrary, any affirmative action for which “measures of success” depend on “whether some proportional goal has been reached” amounts to “outright racial balancing” which is “patently unconstitutional.” For these reasons, DOE is rescinding 10 CFR 1040.8 in its entirety.

Former EEO Officials Respond. While federal agencies begin implementing the executive order (EO), former EEOC and Office of Federal Contract Compliance Programs (OFCCP) officials issued a statement challenging the legal rationale underlying the EO, noting that President Trump’s executive order “may not change a clear statutory mandate and decades of legal precedent.” The statement further notes that contrary to the EO’s claim that the disparate impact theory eliminates meritocracy in the workplace, “disparate impact liability is a means to ensure that merit prevails and that unnecessary and unjustified criteria do not disqualify meritorious candidates on grounds linked to their race, sex, or other protected personal characteristic.” To be sure, the statement will have no impact on the administration’s current views, but it does serve as a reminder to employers and workers that while disparate impact may be deprioritized by the administration, it is still codified in federal law, has been affirmed by the Supreme Court of the United States, and is a viable legal theory for plaintiffs’ counsel.

Immigration: TPS Update.

In a notice published in the Federal Register on May 13, 2025, the U.S. Department of Homeland Security announced that it would not extend the designation of Afghanistan for Temporary Protected Status (TPS), which is set to terminate on May 20, 2025. Pursuant to the required sixty-day notice period, TPS for Afghanistan will now expire on July 14, 2025. According to the notice, “there are notable improvements in the security and economic situation such that requiring the return of Afghan nationals to Afghanistan does not pose a threat to their personal safety due to armed conflict or extraordinary and temporary conditions.”
Venezuela TPS. A bipartisan group of representatives has introduced the Venezuela TPS Act of 2025. The bill would automatically designate Venezuela for TPS for eighteen months—with an option for renewal—from the time the bill is enacted. Of course, enactment will be a significant challenge in the Republican-controlled U.S. Congress. Pursuant to a federal court ruling, Venezuela’s TPS designation has been extended through October 2, 2026, and work authorization remains valid through April 2, 2026.

RIP, Justice Souter. Supreme Court Justice David Souter died last week at the age of eighty-five. Appointed by President George H. W. Bush, Souter served on the Supreme Court from 1990 to 2009. The Buzz remembers Souter for his role in authoring two significant Supreme Court decisions on employment law. Souter authored the majority opinion in Faragher v. City of Boca Raton (1998), which held that “an employer is vicariously liable for actionable discrimination caused by a supervisor, but subject to an affirmative defense looking to the reasonableness of the employer’s conduct as well as that of a plaintiff victim.” Additionally, in Meacham v. Knolls Atomic Power Laboratory (2008)—a disparate-impact case under the Age Discrimination in Employment Act (ADEA) involving a reduction in force—the Court held that the employer, not the employee, has the burden of proving that its employment decision was based on reasonable factors other than age. Souter, writing for the 7–1 majority, stated that while “there is no denying that putting employers to the work of persuading factfinders that their choices are reasonable makes it harder and costlier to defend[,]” the Court must read the ADEA “the way Congress wrote it.”

Rising Temperatures Bring New Obligations for Maryland Employers

Maryland employers are facing the first summer under a heat-related illness prevention standard issued by Maryland Occupational Safety and Health (MOSH). MOSH joins several other Democratic-led Occupational Safety and Health Administration (OSHA) state-plan states, such as California, Nevada, Oregon, and Washington, that have promulgated similar standards in recent years.

Quick Hits

Maryland employers must comply with Maryland Occupational Safety and Health’s (MOSH) new heat-related illness prevention standard.
The MOSH standard has been criticized for its vagueness and the burden it places on employers, leading to potential confusion and inconsistent enforcement.
The Supreme Court’s decision in Loper Bright Enterprises v. Raimondo may limit MOSH’s ability to enforce its interpretation of the new standard, potentially leading to legal challenges.

The MOSH standard applies to all employers whose employees are exposed to an indoor or outdoor heat index of 80°F for more than fifteen minutes in an hour. At a heat index of 90°F or more, high-heat procedures apply. Maryland employers must:

monitor the heat index throughout the work shift;
develop and maintain a written heat-related illness prevention and management plan, made available to their employees and MOSH, that includes an extensive list of required elements, including the importance and availability of rest and drinking water, alternative cooling and control measures, symptoms of heat-related illness and how to respond, acclimatization, high-heat procedures, emergency response, and training;
acclimatize newly hired employees and those returning to the workplace after an absence of seven or more days;
provide adequate and accessible shade, or alternative cooling and control measures;
provide cool and potable drinking water throughout the workday (at least thirty-two ounces per hour per employee); and
provide training regarding heat-related illness prevention at least annually and “[i]mmediately following any incident at the worksite involving a suspected or confirmed case of heat-related illness.” The training must cover a list of specific topics, including environmental and personal factors affecting heat-related illness, acclimatization, the importance of water and rest breaks, signs and symptoms of heat-related illness, responding to heat-related illness, and how the employer will comply. Employers must retain training records for one year following the training date.

The MOSH standard is among the most onerous for employers and has been criticized for the vagueness of its acclimatization, monitoring, and training requirements. While MOSH claims the standard is intended to provide the flexibility to implement a program that considers the unique conditions present at each worksite, the standard’s breadth and ambiguity have caused confusion among employers and set the stage for inconsistent enforcement and litigation.
MOSH promised to provide guidance. It initially issued “Key Requirements” and a “Summary of Key Maryland Requirements fact sheet,” both of which simply reiterate the vague language in the standard. More recently, however, MOSH published an optional model program, itemizing specific and detailed actions that the agency stated employers should consider in developing their plan. Additionally, MOSH conducted a webinar to discuss compliance with the standard, and has now made the recording available on its website. In the webinar, MOSH offered some practical tips beyond the written guidance, including:

Employers may use the wet bulb globe temperature (WBGT) method to monitor the heat index, even though it is not specifically listed as an option in the standard.
The acclimatization schedule is specific to the individual employee—it can be less or more than the general timelines set forth in the standard.
Employers that use their own health care professional (HCP) for pre-employment physicals can direct the HCP to ask the new employee about chronic conditions or medications that pose additional risks for heat-related illness. Although the HCP should not share that specific information with the employer, the HCP can alert the employer that the employee may be more prone to heat-related illness.
Employers may not ask employees directly about their medical conditions or medications in advance of heat-related illness incidents. Employees should be trained that if they have such conditions, they must be more mindful of heat stress.
The definition of “alternative cooling and control measures” includes a variety of protective measures, such as misting equipment and cooling devices, that can alter the employer’s obligation to develop acclimatization procedures and mandatory breaks in accordance with the language in the standard.
The mandatory break periods do not necessarily require cessation of all work but instead can include light duty, paperwork, and similar activities.
Nonworking rest periods of under twenty minutes must be paid in compliance with the Fair Labor Standards Act. Longer nonworking breaks can be unpaid.
Employers must assume that day laborers and temporary employees are not acclimatized.

While the information MOSH provided in the webinar is helpful, additional written compliance guidance would be more helpful to employers developing plans. Given the ambiguous provisions in the MOSH standard, “Monday-morning quarterbacking” may be inevitable, with MOSH taking the position that the employer must be out of compliance if an employee suffers a significant heat-related illness. That position ignores the fact that heat-related illnesses often involve conditions outside of the employer’s control, such as illness, physical fitness, personal medical conditions, and age.
From a legal standpoint, MOSH’s ability to enforce its ad hoc interpretation of the standard’s provisions may be limited. In Loper Bright Enterprises v. Raimondo, the Supreme Court of the United States eliminated deference to an agency’s interpretation of its own statute. The holding will limit the ability of federal agencies to argue successfully that a court must defer to their interpretation of a standard or regulation. The effect of the Loper Bright holding on state regulatory provisions remains to be seen, but it could limit MOSH’s ability to impose its own interpretation of vague provisions on employers, particularly in the absence of written compliance guidance.

Cal/OSHA Announces Discussion Drafts for Revised Wildfire Smoke Protection and Heat Illness Prevention Standards

On Friday, May 9, 2025, the California Division of Occupational Safety and Health (Cal/OSHA) announced discussion drafts for the wildfire smoke regulation, as well as the indoor heat and outdoor heat regulations. The drafts were posted online and provide for substantial changes to both regulations. Future advisory committees will be announced, however, and Cal/OSHA requests written comments by July 7, 2025.

Quick Hits

The revisions to Section 3395, the outdoor heat illness prevention regulation, provide greater details and requirements for acclimatization. The same changes are intended for Section 3396, the indoor heat illness prevention regulation.
Both the indoor and outdoor heat draft revisions would require that the plan be distributed to new employees upon hire, during heat illness prevention training, and at least once a year.
The draft wildfire smoke regulation would adjust the AQI table to indicate that AQI Category for PM2.5 at 301 or above (as opposed to 301 to 500) as “hazardous.” Additionally, the proposed regulation clarifies that a written respiratory protection program and fit testing are not required unless the AQI for PM2.5 exceeds 500.

Despite the fact that the federal Occupational Safety and Health Administration’s (OSHA) heat proposal draft has not been adopted (on June 16, 2025, OSHA will host a virtual public hearing on its proposed rule), Cal/OSHA appears to be moving ahead, attempting to codify aspects of the federal proposal prior to that rule’s adoption.
Next Steps
Employers interested in Cal/OSHA’s draft proposals to revise the wildfire smoke protection and heat illness prevention standards can submit written comments by July 7, 2025, to [email protected] and [email protected]. An advisory meeting will be scheduled at a later date.

Washington Governor Signs State’s ‘Mini-WARN Act’: Notice Required for Site Closings and Mass Reductions in Force

On May 13, 2025, Washington Governor Bob Ferguson signed a bill into law that will require employers with fifty or more full-time employees to notify the state, any union, and affected employers of a business site closing or mass reduction in force (RIF).

Quick Hits

Washington Governor Ferguson has signed the state’s new “Mini-WARN Act” law, requiring notice before closing certain business sites or conducting a mass RIF.
The Washington law requires more notice than what is required under federal law and has specific protections for employees taking state mandated paid family or medical leave.

The law, Senate Bill (SB) 5525 or the “Securing Timely Notification and Benefits for Laid-Off Employees Act,” provides employees with similar protections regarding business site closings or a “mass layoff” as the federal Worker Adjustment and Retraining Notification (WARN) Act. The Washington law is one of many state laws, known as “Mini-WARN Acts,” that provide similar notice protections regarding mass RIFs.
However, SB 5525, which was passed by state lawmakers in April 2025, requires most covered employers to provide more notice than what is required under the WARN Act, and will also protect employees from being included in a reduction while they are taking Washington’s paid family or medical leave. Further, the law grants the Washington State Employment Security Department (ESD), aggrieved employees, or the employees’ union bargaining representative a private right of action to enforce.
Next Steps
The law will now go into effect on July 27, 2025. A more comprehensive breakdown of the SB 5525 can be found in our prior article here.

Federal Court Nullifies EEOC Guidance on LGBTQ+ Protections

On May 15, 2025, a federal court vacated portions of the U.S. Equal Employment Opportunity Commission’s (EEOC) workplace harassment guidance, specifically, guidance on harassment based on sexual orientation and gender identity. The court vacated portions of the EEOC’s enforcement guidance because the EEOC allegedly “exceeded its statutory authority by issuing” it and by “requiring bathroom, dress, and pronoun accommodations inconsistent with the text, history, and tradition of Title VII and recent Supreme Court precedent.”

Quick Hits

A federal district court recently vacated parts of the EEOC’s guidance related to workplace harassment of LGBTQ+ employees.
Despite the Supreme Court’s holding in Bostock that discrimination based on sex in hiring or firing decisions violates Title VII’s prohibition on sex discrimination, the district court vacated the guidance based on the guidance’s “expanded” definition of sex discrimination to include sexual orientation and gender identity.
The court ruled that the EEOC exceeded its statutory authority by requiring accommodations related to bathrooms, dress, and pronouns, which it found inconsistent with Title VII of the Civil Rights Act of 1964 and recent Supreme Court precedent.
This decision follows President Trump’s executive order recognizing sex as binary and immutable, which has created uncertainty for employers regarding compliance with federal, state, and local antidiscrimination laws.

Background
In vacating the EEOC’s guidance related to LGBTQ+ workplace harassment, the U.S. District Court for the Northern District of Texas held that the EEOC’s April 2024 “Enforcement Guidance on Harassment in the Workplace” overstepped by stating Title VII’s prohibition on sex discrimination also prohibits discrimination based on sexual orientation or gender identity. The EEOC guidance flowed from the Supreme Court of the United States’ 2020 decision in Bostock v. Clayton County, Georgia, where the Court ruled Title VII prohibits employers from firing workers for being “homosexual” or transgender. The Court specifically held: “An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” The Court’s key holding in Bostock went on to clearly state that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”
Following the Bostock decision, the EEOC published guidance in 2021 stating employers may not deny employees access to bathrooms, locker rooms, or showers aligning with gender identity. The 2021 guidance also stated an employer intentionally and repeatedly using an incorrect name or pronoun to refer to a transgender worker constituted unlawful harassment under Title VII. As noted in the district court’s memorandum opinion and order, the 2021 guidance was enjoined, but the EEOC issued new guidance in 2024, which the parties challenged.
On January 20, 2025, President Donald Trump released Executive Order 14168 (“Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”), which established that the federal government recognizes only two genders, male and female. This executive order instructed the EEOC to rescind portions of its harassment guidance that were inconsistent with the order.
On January 28, 2025, EEOC Acting Chair Andrea R. Lucas rolled back much of the Biden-era technical assistance related to discrimination and harassment against LGBTQ+ individuals. However, the April 2024 enforcement guidance has not been officially rescinded because the EEOC currently lacks a quorum.
The Court Order
The U.S. District Court for the Northern District of Texas granted summary judgment to the State of Texas and the Heritage Foundation, which had sued to block the EEOC’s 2024 guidance. The court concluded the EEOC may not legally:

define “sex” to include sexual orientation and gender identity; and
define “sexual orientation” and “gender identity” as a protected class under federal law; and
prohibit employers from repeatedly and intentionally using the wrong pronouns for transgender employees.

The court’s reasoning was based on its conclusion that the EEOC’s guidance is “final agency action” and that it “produces legal consequences and determines rights and obligations of covered employers.” According to the order, “the Guidance determines the legal obligations of employers in navigating accommodation requests from transgender employees.”
According to the court, the EEOC’s “Enforcement Guidance contravenes Title VII’s plain text by expanding the scope of ‘sex’ beyond the biological binary. Second, the Enforcement Guidance contravenes Title VII by defining discriminatory harassment to include failure to accommodate a transgender employee’s bathroom, pronoun, and dress preferences.”
Next Steps
Employers will want to note that it is still unclear whether the court’s order—which states the guidance is “vacated”—has nationwide impact, making next steps unclear at this time. Moreover, the vacating of this guidance does not necessarily mean that employers are not required to abide by the EEOC’s enforcement guidance.
Despite the court’s order, employers should note that Bostock continues to be good law. Nevertheless, courts across the country have differed on whether the Bostock decision extends to bathrooms, locker rooms, showers, or similar facilities for employees to use, as well as pronoun and name usage. Various state and local laws and guidance both protect single-sex facility usage based on gender identity, and, alternatively (in government buildings), require usage of single-sex facilities based on birth sex. Indeed, many states and localities protect both gender identity as well as sexual orientation under relevant state and local antidiscrimination laws. Employers should carefully assess how to create and maintain workplaces free of harassment, discrimination, and retaliation under all applicable laws, including with regard to using employees’ names and pronouns.
Acting Chair Lucas and the Trump administration have indicated their opposition to the EEOC guidance at issue, so it is unlikely that they would appeal this case to a federal circuit court. Employers in all states may wish to review their policies and practices to ensure compliance with state and federal laws banning discrimination based on sex.

Workplace Strategies Watercooler 2025: The AI-Powered Workplace of Today and Tomorrow [Podcast]

In this installment of our Workplace Strategies Watercooler 2025 podcast series, Jenn Betts (shareholder, Pittsburgh), Simon McMenemy (partner, London), and Danielle Ochs (shareholder, San Francisco) discuss the evolving landscape of artificial intelligence (AI) in the workplace and provide an update on the global regulatory frameworks governing AI use. Simon, who is co-chair of Ogletree’s Cybersecurity and Privacy Practice Group, breaks down the four levels of risk and their associated regulations specified in the EU AI Act, which will take effect in August 2026, and the need for employers to prepare now for the Act’s stringent regulations and steep penalties for noncompliance. Jenn and Danielle, who are co-chairs of the Technology Practice Group, discuss the Trump administration’s focus on innovation with limited regulation, as well as the likelihood of state-level regulation.

Workplace Strategies Watercooler 2025: NLRB Update—What to Expect in 2025 and Beyond [Podcast]

In this installment of our Workplace Strategies Watercooler 2025 podcast series, Tom Davis (shareholder, Nashville) and Tom Stanek (shareholder, Phoenix)—both of whom are chairs of the firm’s Traditional Labor Relations Practice Group—are joined by Sara E. Olschewske (shareholder, Greenville) to provide the latest updates from the National Labor Relations Board (NLRB). Our speakers reflect on the NLRB under the former administration, when the agency overruled significant precedent and created new rules, most of which dramatically favored labor unions—and how the change in administration has created the opportunity to appoint a new general counsel and two new Board members. The panel also offers insights into what lies ahead for employers in light of the changes brought by the new administration and, in particular, what changes new leadership at the agency may bring to the NLRB and how quickly changes will be implements, and how will they impact employers.

Police Officer on Traffic Duty Assignment is Joint Employee of Their Police Department and the Contractor

When a police officer was seriously injured while working an extra traffic duty assignment, the question wasn’t whether he should get help – it was who should help pay for it.
That question has now been answered by the New Jersey courts in an unreported decision on May 14, 2025. The decision upholds the trial court’s decision that the private company the officer was helping that day must share the cost of his workers’ compensation benefits – even though the officer wasn’t technically their employee.
The ruling was based on the “special mission” doctrine. Normally, if you’re commuting to work and get into an accident, it’s not covered by workers’ comp. But the “special mission” rule says if you’re doing something outside your normal routine because your job requires it – especially in service of both public and private interests – it may still count as work.
The court found that from the moment the officer left the station in a marked patrol car, they were on duty for both the city and the private company. He was heading to a location specifically to provide traffic safety while the contractor worked, which is a service the company had paid the city to provide.
Because the city and the contractor had an agreement in place – including insurance, payment arrangements, and a clause about who’s responsible if something goes wrong – the court said it was only fair that they contribute.
This decision is important because it reaffirms that private companies that benefit from public officers’ services – especially under formal agreements – can be held financially responsible when things go wrong.
For workers, this case reinforces the protections of workers’ compensation – even when your job takes you outside the office or police station.

DOJ Retracts Biden-Era Independent Contractor Classification Rule

On May 1, 2025, the United States Department of Labor’s (“DOL”) Wage and Hour Division announced it would not enforce or apply the Biden-era 2024 Final Rule regarding independent contractor classification (“2024 Rule”). Specifically, the DOL directed its investigators “not to apply the 2024 Rule’s analysis” in enforcement matters. The DOL’s announcement will undoubtedly make it easier to classify workers as independent contractors at the federal level—and continues a seesaw of regulatory pull-back from Biden-era directives. While the 2024 Rule does remain in effect for private litigation and certain state-specific tests still impose higher worker classification standards than the current federal guidelines, the DOL’s announcement is a win for employers seeking to classify workers as contractors.
The 2024 Rule
Under the 2024 Rule, classifying workers as independent contractors was somewhat akin to threading a needle. Imposed on March 15, 2024, the 2024 Rule mandated a complex, employee-friendly analysis that focused on a holistic review of the “totality of the circumstances” to ascertain whether a worker was “economically dependent” on an employer and, therefore, not an independent contractor. These six factors included:

The nature and degree of an employer’s control over the worker;
The worker’s opportunity for profit or loss;
Any investments by the workers and the employer;
The degree of permanence of the working relationship;
The extent to which the work performed is integral to the employer’s business; and
The amount of specialized skill and business initiative required.

Under the 2024 Rule, no factor was assigned more weight than another. Thus, the 2024 Rule was commonly referred to as the “totality of the circumstances” test. The net result was a high degree of both difficulty and uncertainty for employers seeking to classify workers as independent contractors.
Legal Challenges to the 2024 Rule
Business groups quickly challenged the 2024 Rule in courts across the country. At present, five lawsuits are pending. In each, the main argument is that the 2024 Rule was arbitrary, capricious, and imposed an undue burden on businesses. No court has halted or enjoined the 2024 Rule. While the Biden-era DOL mounted a vigorous defense in each case, the current DOL’s retreat from the 2024 Rule renders the ultimate outcome of these cases unclear. For example, in one case pending before the Fifth Circuit (Frisard’s Transp., LLC v. United States), the Court of Appeals stayed the proceeding after the government submitted a status report noting the DOL was in the process of reconsidering the 2024 Rule-at-issue in the litigation. Ultimately, the DOL’s pivot to the more lenient standard could have massive implications for these proceedings.
The DOL Retracts the 2024 Rule
In its May 1 announcement, the DOL directed investigators to analyze a worker’s status under the longstanding “economic reality” test, described in the Department’s 2008 Fact Sheet 13 and 2019 Opinion Letter. The more traditional economic realities test looks at various factors to determine whether a worker is actually in business for themselves (and therefore a contractor) or dependent on the hiring entity (and thus an employee). These factors include:

Whether the work is integral to the hiring entity’s business;
The permanency of the parties’ relationship;
The contractor’s investments in facilities or equipment;
The degree of control by the hiring entity over the contractor;
The contractor’s opportunity for profit or loss;
The amount of independent judgment or initiative required in marketplace competition for the contractor to succeed; and
The degree of independence with which the contractor organizes and operates their business.

This traditional economic reality test is widely considered more employer-friendly. It is highly-likely that the DOL under President Trump will issue new, formal rulemaking on the subject in the near future.
Employer Takeaways
Regardless of the DOL’s announcement, employers should remain vigilant and ensure they are compliant with applicable classification rules; which greatly vary by jurisdiction.
For example, certain states’ classification standards far outpace federal guidelines and are more employee friendly. California, New Jersey, and Massachusetts use the much stricter “ABC test” to determine whether a worker is an independent contractor. Under that test, employers must prove (1) a worker is free from the hiring entity’s control and direction, (2) the work is outside the hiring entity’s usual course of business, and (3) the worker is customarily engaged in an independently established trade, occupation, or business. Employers must prove all three elements to properly classify a worker as an independent contractor.
Employers should also closely monitor regulatory developments. As noted above, it is highly likely that the DOL will implement a new final rule in the near future. If and when that occurs, employers should be prepared for accompanying changes and evaluate their existing worker classifications. Given the shifting administrative environment, it is crucial that employers stay flexible in order to both maximize opportunities presented by favorable changes and, conversely, be prepared if—or when—the regulatory winds shift once more.
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Department of Labor’s New Guidance on Enforcing Biden Administration’s Independent Contractor Rule

On May 1, 2025, the Department of Labor (DOL) issued a field assistance bulletin providing guidance to the DOL’s Wage and Hour Division staff about the “analysis to apply when determining employee or independent contractor status for purposes of enforcing the FLSA.” The DOL is in the process of evaluating the issue and working on establishing the appropriate standard to address this question of the standard for determining worker classification under the FLSA.
Under the Biden administration, the DOL issued a rule—Employee or Independent Contractor Classification Under the Fair Labor Standards Act (2024 Rule)—outlining the analysis for determining employee or independent contractor status under the FLSA. The 2024 Rule specified that six factors would be considered to evaluate the nature of the workers’ status, but no single factor was dispositive. These factors were (1) worker opportunities for profit or loss, (2) worker and potential employer investments, (3) work relationship permanence, (4) employer control over work, (5) extent to which work performed was integral to employer’s business, and (6) use of worker skill and initiative.
The DOL will no longer apply this analysis. Instead, until a new standard is issued, the DOL’s Wage and Hour Division will enforce the FLSA based on Fact Sheet #13 (2008) and as further informed by Opinion Letter FLSA2019-6 (which the Biden administration withdrew but is now reinstated as FLSA2025-2). Fact Sheet #13 emphasized that there is no “single rule or test” for determining worker classification, but there are seven significant factors to consider:

the extent to which the services rendered are an integral part of the principal’s business;
the permanency of the relationship;
the amount of the alleged contractor’s investment in facilities and equipment;
the nature and degree of control by the principal;
the alleged contractor’s opportunities for profit and loss;
the amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor; and
the degree of independent business organization and operation.

Fact Sheet #13 also highlighted that certain factors are “immaterial” to the analysis. These factors include (1) place where work is performed, (2) absence of formal employment agreement, (3) whether the alleged independent contractor is licensed by the state/local government, and (4) the time or mode of pay.
The now-reinstated Opinion Letter FLSA2019-6, issued during the first Trump administration, outlines the DOL’s Wage and Hour Division’s position on gig economy worker classification. The letter analyzes the status of workers who are engaged through a virtual marketplace platform.
Since these workers were not economically dependent on the virtual marketplace platform, did not have a permanent working relationship with the platform, are able to switch to working for different platforms, have opportunities for profit and loss (even if the platform sets prices), are not integrated into the platform (e.g., they do not develop, maintain, or operate the platform), and the platform did not invest in facilities or equipment for the workers, the workers could be classified as independent contractors.
While the DOL continues to evaluate the appropriate standard, stakeholders should exercise heightened caution when structuring working relationships and reexamine current classifications in light of this regulatory shift.

UPDATE – Departments Issue Nonenforcement Policy Statement!

Lawyer on the Move: Using a Legal Recruiter

This month’s article focuses on a topic that I am repeatedly asked about, namely recruiters. Should a recruiter be used in a job search, and if so, how do I find a good one? Given the continued robust lateral market, I decided that this month’s column would focus exclusively on this popular topic.
Over the years, I’ve had the opportunity to work with some of the best recruiters in the US in connection with my lawyer mobility and ethics practice. They’ve taught me a lot about this profession from their perspective. I can say without hesitation that finding a good recruiter to help navigate through your career is critical.
Question: How do I decide whether to use a recruiter in connection with my job search?
Answer: The answer depends on multiple factors, including what type of a position you are looking for, where you are in your career, and how developed your network is in relation to that position.
The first question you must ask yourself is what type of position are you seeking? If you are looking for a position in government or in-house, it may be more effective to rely upon your network connection to make inroads into your job search because, oftentimes, recruiters are not used to helping fill those types of positions. For example, one of my friends recently left private practice for an in-house position. He secured this position because he knew several individuals who worked in the legal department at that organization. That’s why it’s critical to continue to develop relationships throughout your career and to stay in touch with former classmates and colleagues, because one never knows where that classmate or former colleague may end up working. On the other hand, if you are looking to make a lateral move from one firm to another, I would urge you to find a recruiter to assist with your search. The recruiters are most knowledgeable about which firms are looking to hire and for which positions in which offices. They have relationships with management and the recruiting staff at these law firms that can be helpful in making certain that your resume gets in front of the right person.
Second, where are you in your career? If you are just starting out and have not had an opportunity to develop your network, a recruiter is likely a wise choice. A good recruiter will spend time learning about you and your interests and can guide you in terms of which firm may be a good fit for you and why. But if you are someone who has been practicing for a period, you may know someone at a firm you would like to apply to, or someone within the organization that you can contact and ask if the organization is hiring. This contact can also describe the position for you and what it is like to work there.
Whether you choose to work with a recruiter or not, I would encourage you to conduct your due diligence regarding any position you apply for to make certain it will be a good fit for you professionally and culturally.
Question: I received a cold call from a legal recruiter at the office. I am thinking about leaving my current law firm, but I told the recruiter I was not interested and hung up pretty quickly. The reason I did that was I figured that the person on the other end of the phone might be anyone, including someone from my own firm looking to root out disloyal associates. Call me paranoid, but what’s the best way to handle a call like the one I got?
Answer: I understand how you reacted. It’s common. It’s difficult to get those calls at the office, especially if you have not had to field them before. Here are a couple of tips for you moving forward.
First, thank the person for calling. It’s not easy for a recruiter to make cold calls either, so be polite.
Second, if you would like to hear more from the recruiter, you should tell the recruiter that now is not a good time for you to speak. You can provide them with a personal email address or cell phone number, where that person can reach out to you to schedule a convenient place and time to discuss further.
Third, when the recruiter follows up, make sure you schedule a date and time where you can focus and will not be interrupted. If you are going to take the time to speak with a recruiter about a possible job search, you want to take it seriously. Prior to having such a call with the recruiter, you should put together a list of questions to ask, some of which may include: what you like/dislike about your current position; what you are looking for in a new position; and what opportunities does this recruiter have for someone at your level. You also should evaluate the recruiter during this conversation to determine if you want to work with this person. It’s important that you feel comfortable with this recruiter. The best recruiters have a genuine interest in you and will want to work with you throughout your career. During this call, while the recruiter interviews you, you should use this opportunity to interview the recruiter. Recruiters will be presenting your information to potential employers. You want to ensure that this individual acts professionally and will present your candidacy to employers using their years of experience for your benefit.
Question: What are some signs that a headhunter has strong relationships with reputable firms, and how can I assess whether they have the right connections for my practice area?
Answer: As I’ve said before, choosing a recruiter who is a good fit for you is a must. Here are a few tips to make certain you find the best fit.
First, conduct your due diligence. Does this recruiter speak and write articles about their profession? Do they have a podcast or a social media presence? Do they have a well-developed website? The best recruiters are involved in their industry and write articles about trends and hot topics that they are seeing in the lateral marketplace. Does the recruiter offer value-added services, such as assisting you with preparing a lateral partner questionnaire (LPQ) or an application that presents your information and firm metrics in a clear and concise manner? Does the recruiting firm provide its candidates with ethics counsel that can assist them in navigating ethical considerations and obligations when making a move? These are good indicators that the recruiter is reputable and has spent time and resources to invest in his or her candidates. Ask the recruiter which firms they typically work with and how many placements they handle each year. Ask how long they have been recruiting. If you are an associate, ask if they work exclusively on associate recruiting and why. If you are a partner, ask if they focus solely on partner recruiting and why. Finally, ask the recruiter which firms they typically work with and if they specialize in any types of practices. If you have a particular firm or firms in mind as part of your search, ask the recruiter if they have worked with those firms, how often, and in connection with what type of placements. These basic questions will enable you to gain insight into whether this is the correct recruiter for you.
Second, do you like this person? The best recruiters are not just looking to make a one-time placement. Rather, the best recruiters are looking to develop a long-term relationship with you and serve as an advisor to you throughout your career. If the recruiter does not make an effort to really get to know you or your practice, this may be a sign that this person is not the right fit.