Feds unveil rules on tip credits child labor

Federal agencies are moving forward with a series of regulatory proposals that could change how employers handle worker classification, minor labor rules, and civil‑rights reporting, according to filings submitted to the White House Office of Management and Budget on Friday.

Independent contractor rule and other wage‑hour initiatives

The U.S. Department of Labor set an October 2026 deadline for the final rule that would redefine the definition of an independent contractor under the Fair Labor Standards Act (FLSA). The proposal, first published in February, would apply an “economic reality test” focused on two factors: the level of control a worker has over their duties and the opportunity for profit or loss based on initiative, investment, or both. The agency estimates the rule would cost employers an “initial, one‑time regulatory familiarization cost” of $488 million, offset by projected savings of nearly $683 million from increased clarity.

Alongside the contractor rule, the department said it is still working on a joint‑employment standard under the FLSA. A proposal was issued in April, but no timetable for a final rule was provided. The agency also announced a separate proposal to address tip credits against the FLSA’s minimum‑wage floor. It aims to release that rule by August, following a prior effort by the Biden administration that was struck down by a federal judge.

Another pending rule targets work‑hour limits for 14‑ and 15‑year‑olds. The department plans to issue the amendment in September, responding to state and local moves that have relaxed restrictions to help businesses cope with labor shortages. The rule would modify existing FLSA standards on permissible hours for minors.

EEOC seeks to end EEO‑1 reporting and rescind old guidance

The Equal Employment Opportunity Commission (EEOC) announced a plan to discontinue the annual demographic data collection known as EEO‑1 reporting. A notice of proposed rulemaking will be released this month, with a comment period that ends in September. The agency said the data collection “was not mandated by statute” and imposes a “significant financial and administrative burden on America’s employers, including thousands of small businesses.”

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Legal counsel previously advised HR departments to keep EEO‑1 reporting in place until the rule is final, noting that some state statutes still require similar data submissions. The commission also intends to rescind several long‑standing interpretive rules.

While the agency frames the revisions as a reduction of unnecessary burdens, the potential loss of data could limit the ability to track workplace discrimination trends over time. Employers may find themselves dealing with a patchwork of state‑level reporting requirements without a clear federal baseline.

Analysts note that the cumulative effect of these regulatory moves may increase compliance costs for businesses, especially small firms that lack dedicated legal teams. The DOL’s cost estimates for the contractor rule suggest that the government expects net savings, but the upfront familiarization expenses could strain resources in the short term.

Stakeholders are expected to submit comments in the coming weeks.