Following the Department of Labor’s (DOL) late February 2026 proposal of a new worker classification rule, the Small Business Administration (SBA)’s Office of Advocacy has scheduled a Small Business Labor roundtable on April 9.

The meeting focus:  exploration of the DOL’s proposed rule on employee or independent contractor status under the Fair Labor Standards Act (FLSA) and certain related federal laws.

The rule proposes to revise how employers determine whether a worker is an employee or an independent contractor and would rescind the agency’s 2024 final rule and replace it with a framework similar to the standard adopted in 2021 during the first Trump administration.

Under the proposed rule, the test for determining worker classification would place greater emphasis on two core factors: the nature and degree of control exercised over the work, and the worker’s opportunity for profit or loss based on initiative or investment. If both core factors point to the same classification, that outcome is likely to prevail. Additional considerations—the level of skill required, the permanence of the working relationship, and whether the work is part of an integrated unit of production—may still be considered but would carry less weight than the core factors.

The proposal is a shift away from the 2024 rule’s “totality of the circumstances” approach, which treated a non-exhaustive list of factors equally in determining worker classification. The agency believes the new rule will offer greater flexibility and clearer guidance for organizations that use independent contractors, while potentially reducing misclassification risk and related litigation.

The roundtable will include a briefing by DOL of the proposed rule, as well as an opportunity to provide feedback on the rule. The Office of Advocacy is responsible for monitoring compliance with the Regulatory Flexibility Act, which seeks to minimize the regulatory burden on small entities. Small entities consist of small businesses, small governmental jurisdictions, and small organizations—the latter of which are generally defined as any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The Roundtable affords small entities potentially impacted by the proposed rule the opportunity to share their opinion on the rule with the Office of Advocacy virtually.

Please note that presentations made during this roundtable will not substitute for written comments to DOL and therefore, members wishing to comment on the rule should submit written comments to the rulemaking docket.  The comment period for the proposed rule closes on April 28.