In January 2024, the U.S Department of Labor issued a rule requiring businesses to classifying some workers as employees rather than “independent contractors” when they are “economically dependent” on the company. Reuters highlights how this standards has been used “for years” by courts to determine worker classifications.

Reuters reports the new rule may lead to increased labour costs for companies in industries reliant on contracted or freelance labour. It highlights how many labour laws, including minimum wage requirements, apply only to employees. The rule could enable greater enforcement against companies that deliberately misclassify workers.

In March 2024, Reuters reported business groups, including the U.S. Chamber of Commerce, have filed a lawsuit challenging the Government on the rule. The lawsuit alleges the Government has violated federal wage law by defining an “employee” too broadly. Four other challenges to the rule are also pending, according to the article.