DOL Just Proposed Changing the Independent Contractor Test Again: What It Means for Your Crews

Worker classification rules keep moving, and construction keeps being one of the industries most exposed to the question. Owner-operator haulers, specialty installers, equipment operators brought on for a single job — construction leans on independent-contractor arrangements more than most industries, which makes every change to the federal test worth actually reading, not skimming.

On February 26, 2026, the Department of Labor's Wage and Hour Division published a Notice of Proposed Rulemaking that would, if finalized, rescind the 2024 rule and largely reinstate a modified version of the test the DOL used back in 2021. The comment period closed April 28, 2026, and as of this writing the rule remains proposed, not final — meaning the 2024 rule's six-factor test is technically still the operative standard until a final rule is published.

What's Actually Changing

The 2024 rule, issued under the prior administration, used a six-factor "totality of the circumstances" test with no factor weighted more heavily than any other: opportunity for profit or loss, investments by the worker and the employer, permanence of the relationship, nature and degree of control, whether the work is integral to the business, and skill and initiative.

The 2026 proposed rule keeps most of those same factors but restructures the test around two "core factors" given significantly more weight: the nature and degree of control over the work, and the worker's opportunity for profit or loss based on their own initiative or investment. Under the proposal, when both core factors point toward the same classification, the DOL says there's a "substantial likelihood" that classification is correct, and the remaining secondary factors — skill required, permanence, and whether the work is part of an integrated unit of production — are described as very unlikely to outweigh the two core factors. The DOL itself estimates the proposed rule could shift between roughly 250,000 and 750,000 workers nationwide from employee to independent-contractor status if finalized as written.

The Part That Hasn't Changed and Won't

Whichever version of the test ends up final, the DOL's own commentary on the 2026 proposal makes one point explicit that's worth internalizing regardless of which administration is writing the rule: actual practice outweighs contract language. A written independent-contractor agreement that says one thing doesn't override operational reality that says another. If a business controls a worker's schedule, assigns specific tasks hour to hour, and provides all the tools and equipment, that worker looks like an employee under either the 2021-style or the 2024-style test, contract or no contract.

What This Means for a Construction Business Right Now

• The 2024 rule is still the enforceable standard until a final rule publishes — don't restructure your crews around the 2026 proposal before it's actually adopted.

• Audit how much control you exercise over the workers you currently classify as independent contractors — scheduling, task assignment, and who provides the equipment are the questions that matter most under either version of the test.

• An owner-operator who supplies and finances their own truck or machine, sets their own schedule within the job's deadlines, and can take on other work has real evidence in their favor on the opportunity-for-profit-or-loss factor — which is exactly why financing your own equipment, rather than running someone else's, matters for your classification posture as much as your bottom line.

Where Equipment Ownership Fits the Classification Question

Whether you're a general contractor structuring how you bring on specialty crews, or an owner-operator trying to make your independent-contractor status genuinely defensible, owning your own financed equipment — rather than operating a machine the hiring business supplies — is one of the concrete, documentable facts that supports independent-contractor status under any version of the economic reality test. At BFC Equipment Loans, we finance and lease excavators, dozers, skid steers, dump trucks, and semi trucks for startups and existing businesses nationwide, with good or bad credit, including owner-operators building their own book of business.

Related Reading

For more on workforce and labor-market pressures shaping construction right now, see our pieces on the diesel technician shortage and the H-2B visa cap and seasonal construction labor shortage. To explore financing for your next machine, visit our construction equipment financing page.

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