Classification crossroads: Simplifying contractor classes

Just as the trucking industry began adjusting to the Department of Labor’s 2024 framework, a new proposal – announced February 26, 2026 – signals another shift. This latest move would rescind the current standard and make it generally easier for businesses to classify workers as independent contractors rather than employees.

For an industry built on owner-operators and flexible capacity, that’s a meaningful development.

At the center of the proposal is a return to a more familiar concept: the “economic reality” test. The 2024 rule leaned on six equally weighted factors, creating a level of ambiguity that left many carriers and contractors unsure of where they stood. The new proposal simplifies that structure by focusing primarily on two core considerations: control and opportunity for profit or loss.

Questions to answer

The first question is straightforward: who is actually running the business? If a carrier controls schedules, assigns loads and dictates how work is performed, the relationship begins to resemble employment. If the operator owns the equipment, chooses routes and manages day-to-day decisions independently, the case for contractor status strengthens.

If a carrier controls schedules, assigns loads and dictates how work is performed, the relationship begins to resemble employment. If the operator owns the equipment, chooses routes and manages day-to-day decisions independently, the case for contractor status strengthens. - Joel Dandrea, CEO, SC&RA

The second factor looks at financial risk and reward. True independent contractors invest in their operations, carry their own costs and have the ability to influence profitability – whether through rate negotiation, efficiency or business decisions. Employees, by contrast, typically do not share in that level of risk.

Under the proposed rule, when both factors point in the same direction, classification becomes more predictable. For many in trucking, that clarity is the real headline.

Measured approach

For legitimate owner-operators, the proposal may reduce some of the uncertainty that has complicated business planning in recent years. For carriers, it offers a more defined federal framework – provided their practices align with how independent contractors are meant to operate.

But the reality for most SC&RA members is more complicated.

Federal guidance is only one piece of the puzzle. The proposed rule applies to the Fair Labor Standards Act, which governs federal wage and hour requirements. It does not override state-level laws, many of which remain far more restrictive. California’s “ABC test” is the most well-known example, but it’s not the only one. For companies operating across state lines, compliance is still shaped by a patchwork of rules that can vary significantly by jurisdiction.

That matters for specialized transport and heavy haul providers in particular. SC&RA members routinely move equipment and crews across multiple states, often within a single project. The ability to classify workers consistently – and correctly – affects not only labor strategy, but also risk exposure, insurance considerations and overall cost structure.

In that sense, the proposed rule is best viewed as a step toward clarity at the federal level, not a complete solution.

There is also the question of timing. The rule is still in the proposal stage, with a 60-day public comment period that ran through April 28. At press time, industry groups such as the Owner-Operator Independent Drivers Association and the American Trucking Associations were expected to weigh in, along with a range of other stakeholders.

What’s next?

That said, with the comment period now closed, the Department of Labor will review feedback before issuing a final rule – likely later in 2026 at the earliest. Even then, legal challenges are a distinct possibility, which could delay implementation further.

For now, the practical advice remains unchanged: operate under current regulations and ensure that business practices match the classifications being used.

For SC&RA members, the takeaway isn’t just about compliance. It’s about understanding how these changes influence flexibility, cost and competitiveness in a market where workforce strategy remains a critical