A New Labor Rule Proposed — Gig Workers Beware
The U.S. Department of Labor wants to change how gig workers are considered in the workplace. The idea is to make it more difficult for a company to consider a contract worker a contract worker.
This will be especially tough on rideshare companies like Uber and Lyft and on some delivery businesses, and on businesses that rely upon gig workers to get things done.
What will differentiate the gig worker from the employee is income dependency on the company involved. If the gig worker’s income is almost exclusively based on that gig, then — under the proposal — that worker will be considered an employee.
So it comes down to profit or loss, job permanency and how much control a company has over a gig worker.
As you know, there are federal and state labor laws. A minimum wage, overtime pay and other items apply. U.S. Labor Secretary Marty Walsh said that means an employee can cost a company as much as 30% more than a gig worker. He also notes that many business “misclassify vulnerable workers” as independent contractors.
“Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages,” Walsh said.
The labor secretary says it is going to take quite a few months to finalize the new rule. However, when it is done, the rule will overturn one set by the Trump administration that said gig workers can identify themselves as contractors if they choose.
By the way, currently over a third of U.S. workers — 60 million people — have done some type of freelance work in the last year.
Business groups oppose the proposal and want to maintain the business-friendly standard. Gig workers — though not organized — probably agree. The business groups are:
Those groups recently met with representatives at the White House and said this broadly-based rule will hurt workers that want to remain independent and have the flexibility to do so.
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