Labor proposal could upend rules for gig workers, companies
The U.S. Department of Labor is publishing a new proposal on how workers should be classified saying that thousands of people have been incorrectly labeled as contractors rather than employees, potentially curtailing access to benefits and protections they rightfully deserve
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The U.S. Department of Labor has published a new proposal on how workers should be classified saying that thousands of people have been incorrectly labeled as contractors rather than employees, potentially curtailing access to benefits and protections they rightfully deserve.
Misclassifying workers as independent contractors denies those workers protections under federal labor standards, promotes wage theft, allows certain employers to gain an unfair advantage over businesses, and hurts the economy, the department said Tuesday.
The reaction in markets for major gig companies was immediate. Shares of Lyft and Uber tumbled about 13%.
A misclassification can deprive employees of protection under minimum wage laws and overtime pay, according to the department, impacting thousands of delivery workers, custodians, truck drivers, waiters, construction workers and more.
“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” said Secretary of Labor Marty Walsh in a prepared statement. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages."
The Labor department's proposed rule would help employers and workers determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act.
Wedbush analyst Dan Ives said the proposal would constitute a major change for workers and employers from previous years.
“A classification to employees would essentially throw the business model upside down and cause some major structural changes if this holds," Ives wrote.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.