© 2025 American Payroll Institute, Inc.
June 6, 2025 Volume 33 Issue 6
DOL Provides Worker Classification Guidance
On May 1, the U.S. Department of Labor (DOL) Wage
and Hour Division (WHD) published Field Assistance
Bulletin (FAB) 2025-1, which the agency will use to
determine if a worker is an employee or independent
contractor for purposes of the Fair Labor Standards Act
(FLSA) [WHD, 25-722-NAT, 5-1-25].
The FAB supersedes any prior or conflicting guidance
provided to WHD staff on enforcement related to
independent contractor misclassification.
2024 rule ‘under review’
In January 2024, the DOL issued a final rule that modified
how to determine whether a worker is an employee or
an independent contractor under the FLSA (89 F.R. 1638,
1-10-24, see PAYROLL CURRENTLY, Issue 2, Vol. 32). The 2024
final rule went into effect on March 11, 2024, and formally
rescinded the 2021 rule (86 F.R. 1168, 1-7-21).
The DOL is reviewing the 2024 final rule, which is
being challenged in several federal courts (see PAYROLL
CURRENTLY, Issue 5, Vol. 33). The 2024 final rule set forth
an analysis for determining employee or independent
contractor status under the FLSA that relies on a totality-
of-the-circumstances analysis of the economic reality test
rather than using the “core factors” from the 2021 rule.
The analysis focuses on whether each factor shows the
worker is economically dependent upon the employer for
work versus being in business for themselves. The 2024 final
rule lists six factors to guide the assessment of the economic
realities of the working relationship and to help answer the
question of economic dependence under the FLSA: the
opportunity for profit or loss depending on managerial
skill investments by the worker and the potential employer
degree of permanence of the work relationship nature and
degree of control extent to which the work performed is an
integral part of the potential employer’s business and skill
and initiative.
Previous guidance reinstated
WHD said its investigators have been directed not to
apply the 2024 final rule’s analysis in current enforcement
matters while the DOL reviews the rule. Instead, WHD will
rely on principles outlined in Fact Sheet #13 (dated July
2008) and the reinstated opinion letter FLSA2019-6, which
addresses worker classification in the context of virtual
marketplace platforms. Opinion letter FLSA2019-6 has been
renamed FLSA2025-2, although it contains the original text
DOL Provides Worker Classification Guidance............................ 1
IRS Announces HSA Limits for 2026................................................ 2
2024 EEO-1 Data Collection Due June 24..................................... 2
ED Provides Update on Student Loan Collection Efforts. .........3
5th Circuit Pauses ‘White Collar’ Ruling at DOL Request.......... 3
House Passes Budget Reconciliation Bill, Senate to Review. ...3
PayrollOrg Offers Payroll Mid-Year Compliance Update
Course. ...............................................................................................4
Application for Extension to Furnish Statements Can Be Filed
Online................................................................................................ 4
OCSS Announces Changes to Help Lump-Sum Reporting. .....5
IRS Data Affirms Payroll’s Vital Role in Nation’s Tax System. ...5
IRS Releases 2025 Instructions for Forms 1099-R, 5498. ...........5
IRS Announces Quarterly Interest Rates........................................ 6
District Court Orders IRS to Refund ESRP. .....................................6
E-Verify Is Notifying Employers When EADs Are Revoked........ 7
E-Verify Users Need to Take Steps to Increase Account
Security.............................................................................................. 7
ICE Fines Three Colorado Businesses More Than $8 Million. ...7
Supreme Court Issues Ruling in ERISA Case. ................................8
IRS Provides Guidance on Business Names for MeF System.... 8
Virtual Congress to Offer Education, Networking...................... 9
Federal Reserve Publishes 2024 Business Payments Study...... 9
IRS to Retire FIRE System After Filing Season 2026...................10
4th Circuit Vacates Fee Award in FLSA Case...............................10
NTA Recommends ERC Processing Improvements. .................10
USCIS Terminates TPS Designation for Afghanistan. ..............11
DHS Extends TPS for South Sudan Until November.................11
Wage and Hour Roundup. ..............................................................12
Capitol Hill Update............................................................................13
State and Local Highlights...............................................................15
PayrollOrg Raises Concerns About Paid Leave Proposal..............17
PayrollOrg Comments on SSA Notice of New Matching
Program....................................................................................................17
PayrollOrg Comments on Proposed Delaware Overtime Tax
Exemption................................................................................................18
PayrollOrg Supports The Payroll Group on Money Transmitter
Laws............................................................................................................18
June 6, 2025 Volume 33 Issue 6
DOL Provides Worker Classification Guidance
On May 1, the U.S. Department of Labor (DOL) Wage
and Hour Division (WHD) published Field Assistance
Bulletin (FAB) 2025-1, which the agency will use to
determine if a worker is an employee or independent
contractor for purposes of the Fair Labor Standards Act
(FLSA) [WHD, 25-722-NAT, 5-1-25].
The FAB supersedes any prior or conflicting guidance
provided to WHD staff on enforcement related to
independent contractor misclassification.
2024 rule ‘under review’
In January 2024, the DOL issued a final rule that modified
how to determine whether a worker is an employee or
an independent contractor under the FLSA (89 F.R. 1638,
1-10-24, see PAYROLL CURRENTLY, Issue 2, Vol. 32). The 2024
final rule went into effect on March 11, 2024, and formally
rescinded the 2021 rule (86 F.R. 1168, 1-7-21).
The DOL is reviewing the 2024 final rule, which is
being challenged in several federal courts (see PAYROLL
CURRENTLY, Issue 5, Vol. 33). The 2024 final rule set forth
an analysis for determining employee or independent
contractor status under the FLSA that relies on a totality-
of-the-circumstances analysis of the economic reality test
rather than using the “core factors” from the 2021 rule.
The analysis focuses on whether each factor shows the
worker is economically dependent upon the employer for
work versus being in business for themselves. The 2024 final
rule lists six factors to guide the assessment of the economic
realities of the working relationship and to help answer the
question of economic dependence under the FLSA: the
opportunity for profit or loss depending on managerial
skill investments by the worker and the potential employer
degree of permanence of the work relationship nature and
degree of control extent to which the work performed is an
integral part of the potential employer’s business and skill
and initiative.
Previous guidance reinstated
WHD said its investigators have been directed not to
apply the 2024 final rule’s analysis in current enforcement
matters while the DOL reviews the rule. Instead, WHD will
rely on principles outlined in Fact Sheet #13 (dated July
2008) and the reinstated opinion letter FLSA2019-6, which
addresses worker classification in the context of virtual
marketplace platforms. Opinion letter FLSA2019-6 has been
renamed FLSA2025-2, although it contains the original text
DOL Provides Worker Classification Guidance............................ 1
IRS Announces HSA Limits for 2026................................................ 2
2024 EEO-1 Data Collection Due June 24..................................... 2
ED Provides Update on Student Loan Collection Efforts. .........3
5th Circuit Pauses ‘White Collar’ Ruling at DOL Request.......... 3
House Passes Budget Reconciliation Bill, Senate to Review. ...3
PayrollOrg Offers Payroll Mid-Year Compliance Update
Course. ...............................................................................................4
Application for Extension to Furnish Statements Can Be Filed
Online................................................................................................ 4
OCSS Announces Changes to Help Lump-Sum Reporting. .....5
IRS Data Affirms Payroll’s Vital Role in Nation’s Tax System. ...5
IRS Releases 2025 Instructions for Forms 1099-R, 5498. ...........5
IRS Announces Quarterly Interest Rates........................................ 6
District Court Orders IRS to Refund ESRP. .....................................6
E-Verify Is Notifying Employers When EADs Are Revoked........ 7
E-Verify Users Need to Take Steps to Increase Account
Security.............................................................................................. 7
ICE Fines Three Colorado Businesses More Than $8 Million. ...7
Supreme Court Issues Ruling in ERISA Case. ................................8
IRS Provides Guidance on Business Names for MeF System.... 8
Virtual Congress to Offer Education, Networking...................... 9
Federal Reserve Publishes 2024 Business Payments Study...... 9
IRS to Retire FIRE System After Filing Season 2026...................10
4th Circuit Vacates Fee Award in FLSA Case...............................10
NTA Recommends ERC Processing Improvements. .................10
USCIS Terminates TPS Designation for Afghanistan. ..............11
DHS Extends TPS for South Sudan Until November.................11
Wage and Hour Roundup. ..............................................................12
Capitol Hill Update............................................................................13
State and Local Highlights...............................................................15
PayrollOrg Raises Concerns About Paid Leave Proposal..............17
PayrollOrg Comments on SSA Notice of New Matching
Program....................................................................................................17
PayrollOrg Comments on Proposed Delaware Overtime Tax
Exemption................................................................................................18
PayrollOrg Supports The Payroll Group on Money Transmitter
Laws............................................................................................................18
