Wage and Hour Defense Blog

Employers in many states and localities will see an increase in minimum wages starting July 1, 2025.

Many Changes Coming in California

As it often does, California leads the way with a patchwork of minimum wage increases across localities and industries scheduled for this summer.

Los Angeles Prepares for the Olympics with Proposed Wage Increases

Employers, workers, and advocates have been closely following headlines regarding Los Angeles’s so-called “Olympic Wage” initiative. The legislation in question, Ordinance 188610, requires higher minimum wages, minimum health benefits, and training standards for employees of large hotels and employers servicing the Los Angeles International Airport (“LAX”). This is not the first time these industries have been singled out; however, this proposal specifically contemplates the upcoming 2026 World Cup and 2028 Olympics.

On May 1, 2025, the U.S. Department of Labor’s (DOL) Wage and Hour Division (Division) issued Field Assistance Bulletin (FAB) No. 2025-1 (“FAB 2025-1”), announcing that it is currently working to reformulate the test as to how independent contractor status is determined under the Fair Labor Standards Act (“FLSA”).  Although it is unclear what contours the revised rule will eventually take, FAB 2025-1 signals a clear intention to make it easier for businesses to classify workers as independent contractors. 

The rulemaking process will take time.  FAB 2025-1 accordingly provides that, during the interim, the DOL will no longer enforce a 2024 rule established under the Biden administration.  The 2024 rule, which consisted of a non-exhaustive multi-factor test, is largely viewed as placing a difficult hurdle with respect to independent contractor classification.

FAB 2025-1 relaxes the DOL enforcement standard by reverting to the “economic reality” framework outlined in Fact Sheet #13 (July 2008), as informed by Opinion Letter FLSA2019-6. The “economic reality” framework asks whether the worker is an independent contractor in business for themselves, or an employee economically dependent on the business they serve. While this does not involve a single rule or test, significant factors include: