The rules for worker classification have shifted yet again. As of early 2026, the DOL has moved to replace the complex 2024 "totality of circumstances" framework with a streamlined test that favors independent contractor status for those with genuine entrepreneurial skin in the game. With the public comment period for this new rule closing on April 28, 2026, organizations must act now to audit their 1099 populations.

This session breaks down the "Two Core Factors" that now carry the greatest weight in federal audits. We will also explore the OBBB’s new tax-free "Tip and Overtime" deductions, which apply to both W-2 and 1099 workers, and how misclassification in 2026 can lead to massive retroactive liabilities under the expanded IRS-DOL data-sharing initiative.

Learning Objectives:

  • Analyze the February 2026 Proposed Rule and the shift from "unweighted factors" back to the "Core Factor" hierarchy.
  • Determine if a worker meets the two primary prongs: Nature and Degree of Control and Opportunity for Profit or Loss.
  • Evaluate the OBBB’s impact on 1099s, specifically the new $25,000 "above-the-line" deduction for tips and $12,500 for overtime.
  • Distinguish between "legal compliance" (which no longer counts as employer control) and "operational direction" (which still triggers W-2 status).
  • Mitigate risk by aligning federal DOL standards with state-level "ABC" tests, which remain stricter in jurisdictions like California and New Jersey.

Major Topics:

  • Independent Contractors vs. Employees: Why Classification Matters
  • Overview of the 2026 rule change and six-factor test
  • How this differs from previous DOL classification standards
  • Key risks and compliance exposures for employers
  • How to review current contractor roles and classifications
  • Policy, contract, and onboarding updates needed
  • Preparing for audits and investigations
  • Cross-state classification challenges
  • Documentation strategies to support defensibility

Who Will Benefit:

  • HR and Compliance Professionals
  • In-house Legal and Payroll Teams
  • Business Owners and Senior Leadership
  • Operations Managers overseeing Freelance or Contract Workforces
  • Anyone Responsible for workforce structure or Classification Compliance

HRCI Credits | SHRM Credits

  • HRCI : 1.5 | SHRM : 1.5
  • HRCI Credits: 1.5
  • SHRM Credits: 1.5

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HR Certification Institute’s® (https://www.hrci.org) official seal confirms that Pioneer Educator meets the criteria for pre-approved recertification credit(s) for any of HRCI’s eight credentials, including SPHR® and PHR®.

This Program, has been approved for 1.5  HR (General) recertification credit hours toward aPHR®, aPHRi™, PHR®, PHRca®, SPHR®, GPHR®, PHRi™ and SPHRi™recertification through HR Certification Institute® (HRCI®).

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The NEW 2026 DOL and OBBB RULES ON OVERTIME

PRESENTER(s): Mark Schwartz
EVENT DATE - 2026-01-08