Independent Contractor Misclassification and Compliance News November 2025

As the independent workforce continues to grow, so do the issues of worker compliance and misclassification. It is important for enterprises to remain informed about the latest laws, regulations, and developments surrounding these topics. Each month, we bring you the latest news stories from around the web.

U.S. States and Cities Continue to Lead Misclassification Enforcement Efforts

Earlier this year, the Trump Department of Labor announced that it would not enforce the Independent Contractor Rule promulgated in 2024 saying that it “will no longer apply the 2024 Rule’s analysis when determining employee versus independent contractor status in FLSA investigations.” The Trump Department of Labor also said that one of its regulatory priorities is to review and possibly rescind the 2024 Rule.

With the Trump Department of Labor adopting a less aggressive enforcement posture, city and state attorneys general and Departments of Labor have been pursuing companies that misclassify workers as independent contractors. Here are a few examples of how they are driving misclassification enforcement efforts.

• The New Jersey Attorney General’s Office announced that Lyft paid $19 million in response to claims that Lyft had not paid unemployment contributions for drivers classified as independent contractors from 2014 to 2017. The New Jersey Attorney General also announced a lawsuit against Amazon for misclassifying delivery drivers as independent contractors.
• The California Labor Commissioner’s Office (LCO) recently cited Costco Wholesale Corporation and Ryder Last Mile Inc. for misclassifying delivery drivers as independent contractors. The LCO also cited the Ritz-Carlton Hotel Company LLC and three janitorial contractors for misclassifying janitors as independent contractors.
• The California Attorney General announced a $10 million judgment and permanent injunction against a company for misclassifying in-home care workers as independent contractors instead of employees.
• The City Attorney for San Francisco was active earlier this year initiating lawsuits against companies for misclassifying delivery drivers and workers for a staffing company.
• The Attorney General for the District of Columbia settled claims this year with a construction company, a car detailing company, and several companies that misclassified delivery drivers as independent contractors.

While companies can expect less enforcement from the federal government, they should continue to be vigilant to properly classify workers because city and state officials continue to pursue claims against companies for misclassification.

For more information, check out our resources page on misclassification and compliance. If you have any questions about engagement, classification, or management of your independent workforce, we’re always here to help.