The Biden administration is handing out new regulations left and right, and this time, they’re after gig workers and freelancers.
There are countless individuals who rely on this type of work, and these people are now frustrated at Biden for making their jobs harder.
The U.S. Department of Labor has issued a final rule that threatens to upend the gig economy, leaving companies and workers in turmoil.
This latest rule, set to take effect on March 11, forces companies to reclassify some workers as employees rather than independent contractors, a decision that has angered business groups and is expected to face legal challenges.
The rule, projected to hike labor costs significantly for industries relying on contract labor, has sparked outrage among conservatives who see it as another overreach by the Biden administration.
Most notably, sectors such as trucking, manufacturing, healthcare, and gig services are bracing for the impact.
Employers, particularly those utilizing independent contractors, fear the financial strain this rule will impose.
Federal and state labor laws, which include minimum wage and overtime pay, currently apply only to employees, and studies indicate that employees can cost companies up to 30% more than independent contractors.
The new rule replaces a Trump administration regulation that was favored by business groups, asserting that workers with their own businesses or free to work for competing companies could be treated as contractors.
The shift in stance adopts a standard used by courts for years, focusing on factors like the degree of control companies exercise over workers and the nature of the work performed.
However, critics argue that this move may open the floodgates to costly litigation and confusion.
Republican lawmakers, including Senator Bill Cassidy from Louisiana, are already gearing up to fight against this perceived threat to workers’ flexibility.
Cassidy released a statement arguing that the new rule would cause more people to join unions, since only employees and not independent contractors can be part of unionized work.
Acting U.S. Labor Secretary Julie Su defended the decision, emphasizing that the misclassification of workers disproportionately harms low-income workers who would benefit the most from legal protections like a minimum wage and unemployment insurance.
On a call with Reuters reporters, Su stated, “A century of labor protections for working people is premised on the employer-employee relationship.”
While worker advocates and some Democratic officials applaud the rule as necessary for providing basic protections, conservative voices argue that it tips the scales too far, stifling the flexibility and opportunities that independent contractors currently enjoy.
Marc Freedman, Vice President at the U.S. Chamber of Commerce, the nation’s largest business group, condemned the rule, calling it “completely unnecessary.” Freedman asserted that the Department’s success in tackling bad actors who misclassify workers makes this new rule redundant. The Chamber is considering legal action to challenge the rule in court.
The potential impact on gig workers, a significant part of the modern economy, has been a focal point of concern.
While the Labor Department claims the rule targets industries notorious for worker misclassification, it may inadvertently disrupt gig-based services such as delivery and ride-sharing.
The Chamber of Progress, a trade group representing tech companies, raised alarms, stating the rule could negatively impact an estimated 3.4 million gig workers, resulting in a staggering $31 billion in lost income.
As companies like Uber, Lyft, and DoorDash express their concerns, the true consequences of this rule remain uncertain.
Will it be a step toward protecting workers, as the administration claims, or a heavy-handed move that stifles flexibility and cripples businesses?
Only time will reveal the fallout from this latest labor policy, but for now, it appears to be another battleground in the ongoing war between the Biden administration and those who champion the independence of American workers.
Informed American will keep you up-to-date on any developments to this ongoing story.