New Labor Department Rule Could Eliminate Gig Work

Independent contractors would become employees under reclassification.

The Department of Labor has released a final rule that would prohibit the classification of some workers as independent contractors. The new rule provides an interpretation of which workers should qualify for protections under the 1938 Fair Labor Standards Act.

The current classification of workers as contractors or as independents exempts them from employee benefits coverage, such as minimum wage, healthcare insurance, and paid holidays or sick days.  The rule is intended to determine whether or not workers are “economically dependent,” and factors such as “opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer’s business.” 

Acting Secretary of Labor Julie Su said, “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.” 

Many business groups have expressed opposition to the new rule. The U.S. Chamber of Commerce stated it may challenge the new rule in court. Companies such as Uber, Lyft, and DoorDash rely heavily on contracted workers to provide their services to customers. Officials with both Uber and Lyft said they do not expect an immediate impact from the rule. 

The new rule becomes effective on March 11. 

As the Lord Leads, Pray with Us…

  • For discernment for President and CEO Suzanne Clark as she oversees the U.S. Chamber of Commerce.
  • For wisdom for Acting Labor Secretary Su as she seeks to protect U.S. workers from exploitation.
  • For judges who may head litigation regarding the new classification rule for independent contractors.

Sources: Just The News, ABC News, Wall Street Journal, Fortune 


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