Labor proposal could upend rules for gig workers, companies

The Biden administration proposed new standards Tuesday that could make it more difficult to classify millions of workers as independent contractors and deny them minimum wage and benefits. The U.S. Department of Labor rule, which could take months to take effect, would replace a scrapped Trump-era standard that had lowered the bar for classifying employees as contractors, workers who are not covered by federal minimum wage laws and are not entitled to benefits including health insurance and paid sick days. The rule could bolster labor advocates seeking to challenge worker classification in courts, or state lawmakers seeking to pass stricter laws for designating workers as contractors, said Patricia Campos-Medina, executive director of the Worker Institute at Cornell University’s School of Industrial and Labor Relations. “The only thing the federal rule does is it creates a basic standard for evaluation.” The Labor Department said 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. In California, for example, hundreds of port truck drivers seeking to preserve their independent contractor status shut down operations in the Port of Oakland last summer to protest the state’s gig workers law.