Labor Department Proposes Changes to Independent Contractor Rules
A delivery driver for UberEats and DoorDash in New York last January.
Photo:
Jutharat Pinyodoonyachet for The Wall Street Journal
The Labor Department said it would revisit rules that designate whether workers are classified as employees or independent contractors, a move that could affect millions of workers in healthcare, restaurants, ride-share transportation, and many other industries.
The department released a rule proposal on Tuesday that would change how labor laws define independent contractors. The new rule, if approved, would rely on a “multifactor economic reality test” to determine whether a worker is truly in business by themselves and controls aspects of their employment like whether they perform managerial duties, how they are supervised and whether they are able to set prices.
Ride-share stocks, including
Uber
Technologies Inc. and
Lyft Inc.,
declined sharply following the news.
The new rule would replace a Trump-era rule—finalized just days before the Biden administration took office—and return to an approach favored by the Obama administration. The Trump administration rule made it more difficult for a gig worker, such as an
Uber
or
DoorDash
driver, to be counted as an employee under federal law. The Biden administration changes would make it easier for those workers to be covered by federal minimum-wage and overtime laws.
“The 2021 Independent Contractor Rule is out of sync with what the courts have been saying for decades,” said Solicitor of Labor Seema Nanda, a senior department official.
Write to Gabriel T. Rubin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
A delivery driver for UberEats and DoorDash in New York last January.
Photo:
Jutharat Pinyodoonyachet for The Wall Street Journal
The Labor Department said it would revisit rules that designate whether workers are classified as employees or independent contractors, a move that could affect millions of workers in healthcare, restaurants, ride-share transportation, and many other industries.
The department released a rule proposal on Tuesday that would change how labor laws define independent contractors. The new rule, if approved, would rely on a “multifactor economic reality test” to determine whether a worker is truly in business by themselves and controls aspects of their employment like whether they perform managerial duties, how they are supervised and whether they are able to set prices.
Ride-share stocks, including
Uber
Technologies Inc. and
Lyft Inc.,
declined sharply following the news.
The new rule would replace a Trump-era rule—finalized just days before the Biden administration took office—and return to an approach favored by the Obama administration. The Trump administration rule made it more difficult for a gig worker, such as an
Uber
or
DoorDash
driver, to be counted as an employee under federal law. The Biden administration changes would make it easier for those workers to be covered by federal minimum-wage and overtime laws.
“The 2021 Independent Contractor Rule is out of sync with what the courts have been saying for decades,” said Solicitor of Labor Seema Nanda, a senior department official.
Write to Gabriel T. Rubin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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