The Trump administration announced on Mar. 11 new regulatory actions by the Department of Labor and the National Labor Relations Board aimed at restoring traditional definitions for independent contractors and joint employment. These changes reverse policies from the Biden era that had expanded union influence over workers classified as employees rather than independent contractors.
The issue is significant because it affects how millions of American workers are classified, which in turn determines their eligibility for union representation and obligations such as paying union dues. The move also impacts business owners who rely on contract labor or franchise models, as well as unions seeking to expand their membership base.
According to the announcement, both the Department of Labor and the National Labor Relations Board have taken steps to return to previous standards that limit when a business can be considered a joint employer or when a worker can be classified as an employee instead of an independent contractor. The article states, “Both the Department of Labor and the National Labor Relations Board sided not with American Compass’s sympathies for Big Labor, but the old Republican Taft-Hartley consensus protecting workers’ rights to choose not to participate in the activities of labor unions.” It further explains that under traditional rules, only businesses with direct control over hiring, firing, wage rates, and job descriptions would be liable as employers.
During the Biden administration, regulations were issued that broadened these definitions. For example, a rule allowed businesses to be considered joint employers even if they only had indirect or potential control over workers. This rule was challenged in court by business groups led by the U.S. Chamber of Commerce and was ultimately blocked by a federal court in Texas.
Recently, on February 27, the NLRB issued a formal notice reinstating its earlier standard requiring “direct and immediate control” for joint-employer liability. Meanwhile, the Department of Labor has proposed draft revisions returning to pre-Biden criteria for classifying independent contractors under the Fair Labor Standards Act.
Concerns had been raised about whether Republicans would support pro-union policies after appointing Lori Chavez-DeRemer as Secretary of Labor. However, according to statements in this release, “Thus far, that does not seem to be the case.” The article concludes that these regulatory changes signal continued support for traditional labor practices rather than expanding union power.
