WASHINGTON — President Joe’s administration Biden enacted a new labor rule Tuesday that seeks to prevent workers from being misclassified as “independent contractors,” a move that could bolster both legal protections and pay for millions of American employees.
The Labor Department rule, which the administration proposed 15 months ago, is aimed at workers who do not receive federal minimum wage protections or qualify for employee benefits, such as health coverage and paid sick days.
“Misclassifying employees as independent contractors is a serious problem that deprives workers of basic rights and protections,” said Acting Secretary of Labor Julie Su. “This rule will help protect workers, especially those who face a higher risk of exploitation, by ensuring they are classified correctly and receive the wages they have earned.”
Worker advocates have supported the rule, arguing that employers are increasingly taking advantage of lax rules to misclassify workers and avoid paying the minimum wage and benefits. In a report, the Economic Policy Institute states that construction workers, truck drivers, cleaners, landscapers, security guards and call center workers are some of the most frequently misclassified. It is estimated that misclassified construction workers lose between $10,177 and $16,729 annually.
Companies opposed to the measure
Major business groups have opposed the new rule, saying it could burden employers with costly and unnecessary regulations and threaten the flexibility of many workers who want to be contractors. The U.S. Chamber of Commerce issued a statement Tuesday saying it could challenge the new rule in court.
However, major app-based platforms have expressed confidence that the new rule will not force them to reclassify their independent drivers.
“This rule does not materially change the law under which we operate, and will not affect the classification of the more than one million Americans who turn to Uber to earn money flexibly,” said Uber head of federal affairs CR Wooters. it’s a statement.
Flex Association, a group representing major app-based ride-hailing and delivery platforms, said it does not expect any immediate impact on the app-based gig economy. Still, the group said that “the new guidance could create significant uncertainty for millions of small business owners and entrepreneurs.”
Source: With information from AP
