Are you running a business, hiring freelancers, or working as one yourself? You may want to pay attention because on May 1st, the Department of Labor (“DOL”) changed the rule, again, for who counts as an “independent contractor.” 

In a May 1st memo, the DOL stated it is no longer following its own 2024 rulebook when deciding how one is classified as an independent contractor versus an employee. The 2024 test required courts to look at two factors: 

1. How the business controls the employee’s work (how much the business directs the worker); and 
2. If the worker can make (or lose) money based on their own decisions (or, to put it another way: does the worker have opportunity for profit or loss?) 

Instead of following the 2024 rules, DOL investigators will revert to using the 2008 “economic reality” test. Instead of two, this test has seven factors, which include but are not limited to questions like: 

• Is the worker’s role central to the business? 
• Do they work there long-term? 
• Who controls how the work gets done? 
• Did the worker invest in their own tools or equipment? 
• Can they make a profit, or suffer a loss, based on how they work?
• Does the worker need entrepreneurial skill to succeed at the job?
• Is the worker's business their own, or an extension of their employer's?

So, what does this mean for you? 

It means no one factor decides the issue; just calling someone a “contractor” in a written agreement doesn’t and never cut it. But here’s the twist: the 2024 rule is still in effect for private litigation. So, if an employee sues a business, courts might still apply the newer framework. On the other hand, if the DOL comes calling instead of a private employee, courts will use the 2008 test.  

For now, businesses should tread carefully. Abiding by two separate standards can be difficult; one can imagine, for example, that one court could decide that a worker is an employee under the 2008 test, but another court determines the same worker is an independent contractor under the 2024 rule. The rules got fuzzier, and the risks grew larger. Misclassifying employees and contractors can have major consequences: unpaid wages, liquidated damages, lawsuits, and more.

So, what’s your take? Should “employee versus independent contractor” classification hinge on a set checklist? Or is a flexible, case-by-case approach the better path? 

President Trump issued Executive Order 14281, which purports to eliminate disparate impact discrimination, but can a President do that?

Disparate impact discrimination refers to discrimination that is proven by the existence of a discriminatory outcome, but instead of being based on a discriminatory act undertaken with discriminatory intent, it is based on a neutral policy that is not required to be proven to be based on discriminatory intent.

3 Takeaways from the EO:

1. Elimination of Disparate Impact: The order's primary goal is to eliminate the use of "disparate-impact liability" in federal contexts. 
2. Revocation of Regulatory Approvals: The order revokes specific presidential approvals of Department of Justice Title VI (i.e., funding recipients prohibition on discrimination based on race, color, and national origin) regulations related to disparate impact.
3. Review and Revision of Existing Regulations and Cases: Federal agencies, including the EEOC and DOJ, are tasked with reviewing and revising existing regulations, pending investigations, and consent judgments that rely on disparate-impact theory.   

However, eliminating disparate impact is a topic for Congress, not the President. 

In fact, this EO is inconsistent with Statutory/Case Law and rises the potential for lawsuits. To be clear, Title VI, which is the main thrust of this EO, can be established by disparate impact analysis based on Supreme Court precedent from Lau v. Nichols. As to Employment Discrimination (i.e., Title VII of the Civil Rights Act of 1964), disparate impact is also a valid legal theory for proving employment discrimination based on the Supreme Court in cases like Griggs v. Duke Power Co. Similarly, the Fair Housing Act and the Equal Credit Opportunity Act also recognize disparate impact. This order attempts to undermine these protections, potentially leading to increased employment, education, housing, and credit discrimination. Moreover, the Executive Order's argument that disparate-impact liability violates equal protection is flawed. Equal protection aims to prevent discriminatory outcomes, not give paths to discriminate. 

That is all not to say whether the Trump Administration is right or wrong on their policy initiative to revoke disparate impact analysis while focusing on a meritocracy. Instead, this is to say that this should not be undertaken by an ineffective Executive Order, but instead it needs to happen legislatively through Congress. By doing it this way, the Trump Administration is going to create confusion for business that results in more discriminatory lawsuits because decision-makers will trust the EO to do what it purports to do while it likely does not much of anything at all. 

Last week, HHS issued a "clarification" to their final rule "Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance," which creates more confusion than it solves and is expected to lead to litigation. 

The clarification is that the actual regulatory text of the final rule does not include gender dysphoria as a disability. Instead, it aligns with existing exclusions in federal law (29 U.S.C. 705(20)(F)), which exclude "gender identity disorders not resulting from physical impairments" from the definition of disability.

However, this can clarification can lead to litigation because it creates confusion with the New York State Human Rights Law (NYSHRL) by not explaining that states and locales can have more protections. In fact, the NYSHRL has broader protections in that it explicitly prohibits discrimination based on gender identity. This protection is significantly broader than the federal stance clarified by HHS, which, based on the Rehabilitation Act and ADA exclusions, does not recognize gender dysphoria as a disability in its regulatory text (unless it results from physical impairments). This creates a direct conflict:

• Federal Level: Under federal regulations, as clarified, individuals experiencing gender dysphoria (not resulting from physical impairments) may not be considered disabled and thus may not be protected under federal disability non-discrimination laws in programs receiving federal funding.
• New York State Level: Under the NYSHRL, discrimination based on gender identity is explicitly prohibited, regardless of whether it's classified as a disability under federal law. This means individuals in New York experiencing discrimination related to their gender dysphoria could have legal recourse under state law, even if they don't under the clarified federal interpretation.

• Individuals: People with gender dysphoria in New York might be unsure of their rights and protections. They might incorrectly believe that the federal clarification limits their rights under state law.
• Entities Receiving Federal Funding in New York: Organizations and programs receiving federal funding in New York are obligated to comply with both federal and state anti-discrimination laws. The federal clarification might lead some to mistakenly believe they don't need to accommodate individuals with gender dysphoria under disability non-discrimination principles, even though the NYSHRL's broader definition of discrimination based on gender identity would still apply. This could lead to discriminatory practices and subsequent litigation under state law.
• Potential for Legal Challenges: The federal clarification could be used by defendants in New York state law discrimination cases to argue that gender dysphoria is not a disability and therefore not protected under disability-related provisions, even though the NYSHRL's protection is based on gender identity, not solely disability status. This could lead to legal challenges where courts in New York will need to clearly delineate the scope and applicability of the NYSHRL's protections for gender identity in light of the federal clarification.
• Enforcement Discrepancies: State agencies in New York responsible for enforcing the NYSHRL may continue to investigate and prosecute discrimination claims based on gender identity, even if the federal government takes a different approach based on its disability regulations. This difference in enforcement could lead to further confusion and potential legal clashes.

While the HHS clarification aims to resolve ambiguity at the federal level regarding the enforceability of preamble language, it simultaneously creates a potential conflict and source of confusion with the broader protections offered by the New York State Human Rights Law concerning gender identity. This divergence in legal interpretation and scope is likely to lead to litigation in New York as individuals and the state seek to uphold the protections afforded under state law.

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The National Association of Realtors ("NAR") is shaking up how real estate brokers market properties. After months of debate, NAR announced it will keep its Clear Cooperation Policy ("CCP"), the rule that requires agents to put listings on the MLS within one business day of publicly marketing them. But there's now a twist: NAR is adding a new option called “delayed marketing exempt listings.”

Under the new policy, sellers can opt to delay marketing their property on third-party listing sites that pull data from MLS for a period set by the local MLS. However, the property will still be visible on MLS to MLS participants and subscribers, meaning brokers and agents can still access it. How is this new? Well, the public won’t see it right away on sites like Zillow. This gives sellers and their agents more control over when the listing hits the wider market.

For brokers, this opens up some interesting strategies. A delayed listing could give sellers more time to prepare their property or test the waters with select buyers before going fully public. On the flip side, this could limit public exposure, potentially reducing competition and impacting the final sale price.

Brokers, be aware of the compliance requirements. If a seller opts for delayed marketing, they’ll need to sign a disclosure stating they understand the tradeoff: they’re waiving the benefits of immediate public marketing. It’s also worth keeping an eye on how local MLSs handle the days-on-market ("DOM") rule. Some might count the delayed period toward DOM, which could make a listing look older faster.

At the end of the day, this new policy gives brokers and sellers more flexibility, but with some new risks. Will delayed listings benefit sellers by giving them more control? Or will they reduce transparency and limit buyers’ access to inventory? Let us know your thoughts in the comments. 

If you’re running a business or involved in corporate compliance, you’ve likely been keeping an eye on the Corporate Transparency Act ("CTA") and its requirements for reporting beneficial ownership information ("BOI"). Well, here’s some news you might welcome: the Financial Crimes Enforcement Network ("FinCEN") has made a change that affects when and how companies need to comply.