The big picture: The Department of Labor's comment period for its proposed independent contractor rule has closed, moving the regulation closer to finalization. This rule aims to replace the 2024 framework, potentially reclassifying many gig workers.

Why it matters: This shift could significantly impact how businesses, particularly staffing firms, classify and engage contingent workers, increasing compliance risks and operational costs.

Between the lines:

• The rule would rescind the 2024 "totality-of-circumstances" framework.
• It seeks to reinstate a prior, more stringent test for independent contractor status.
• Thousands of submissions were received from independent workers and trade groups.

Staffing & HR impact: Staffing firms must prepare for potential reclassification challenges, impacting gross margins and requiring updated compliance protocols. HR departments will face increased scrutiny on worker classification to avoid misclassification penalties.

The bottom line: Companies should audit their contractor relationships now to mitigate future compliance risks.