Gig Workers Gain Ground in Worker Classification Protections

 

The Biden administration has enacted an important new policy regarding employee classification. It replaces a rule under Trump that made it easier for companies to designate workers as “independent contractors,” which denied benefits like minimum wage, healthcare and paid leave.

Gig workers at places like Uber and DoorDash, who enjoy scheduling flexibility but lack protections, have advocated for changes. The updated rule takes effect March 11th to curb misclassification. Employers must assess if a worker substantially contributes to business operations.

There are now six factors for determining independent contractor status versus regular employee, such as employer control, specialized skills needed, length of employment relationship, and personal investment like owning a vehicle. Some gig workers may gain proper employee status instead of contractor.

However, this rule provides guidance only and does not replace laws Congress or states enact. It interprets a 1938 law regarding minimum standards. While shares of gig companies rebounded after leaking, long-term compliance costs remain unclear as firms adapt to the classification shifts. Overall, the rule aims to ensure more workers receive basic workplace protections.