According to a Freelance Forward: 2022 report released by Upwork, 60 million Americans performed freelance work over a twelve month period, representing 39% of the entire U.S. workforce. What’s more, 51% of all freelancers provided skilled services such as computer programming, marketing, IT, and business consulting in 2022. It’s all the more evident that this constituency of independent workers makes-up a large and growing contingent of the American workforce, making it increasingly essential for U.S. labor policies to recognize and protect the flexibility and efficiency that comes with hiring skilled independent contractors for temporary work.
One complication in surveying the independent contractor landscape involves the increasingly varied nomenclature that has evolved with subtle but distinct differences: independent contractor, freelancer, temporary worker, gig worker, self-employment, etc. While there often are real differences in these classifications, the IRS tends to only see two classifications: a W-2 or a 1099 worker. The rest is semantics, at least according to the IRS.
Agencies and Independent Contractors
In the agency ecosystem, independent contractors have always played an important function in executing client campaigns. But with some of the shift from agency of record (AOR) work to more project-based work, independent contractors will play an outsized role in the future, as agencies will need to scale their workforces quickly in response to project lifecycles.
While how heavily an agency chooses to utilize independent contractors will always be dependent on a number of factors, including of course client preference, there is a growing confluence of federal and state legislative, regulatory, and legal developments that could threaten an agency’s ability to engage independent contractors as needed.
2026 Regulatory Update
In February 2026, the Department of Labor (DOL) introduced a new proposed rule intended to rescind and replace the restrictive 2024 worker classification framework. This latest proposal seeks to return to a “core factors” analysis, prioritizing the nature of control and the opportunity for profit or loss—a shift that would provide significantly more clarity and flexibility for the agency talent model.
The 4As has been a leading voice in this debate, submitting comprehensive written comments to the DOL on behalf of our members. Our advocacy was twofold: submitting independent 4As comments and joining a unified effort with the Independent Work Coalition. In both filings, our advocacy highlighted the critical importance of a stable independent contractor status to the advertising ecosystem and urged the DOL to finalize a rule that recognizes the economic reality of modern freelance and project-based work.
