The Biden administration has introduced a new rule that will impact how workers are classified as independent contractors or employees. This rule replaces a more employer-friendly rule from the previous administration and aims to provide more labor protections for workers. The new rule takes into account the entire economic relationship between the worker and the employer, rather than just focusing on control of working conditions and profit or loss opportunities.
Employment attorney Denise Keyser explains that the new rule requires workers to demonstrate that they are truly independent, running their own business, and investing in materials or equipment. This shift in focus will make it more challenging for gig economy companies to justify why their workers, such as ride-hail drivers, are not eligible for full employment benefits. The requirement for workers to negotiate or set their own prices is particularly problematic for many app-based workers who lack the power to do so.
Sally Dworak-Fisher from the National Employment Law Project highlights the potential impact of the new rule on gig work, noting that it will make it harder for companies to continue classifying workers as independent contractors. The U.S. Chamber of Commerce has voiced opposition to the new rule, expressing concerns that it will discourage companies from engaging independent contractors out of fear of them being reclassified as employees.
Vice President Marc Freedman of the U.S. Chamber of Commerce predicts that the new rule will have a negative impact on various professions that rely on independent contractors, such as financial services and web design. The rule is set to go into effect on March 11, prompting discussions and debates within the business community about its potential implications.
In conclusion, the new rule on independent contractor classification represents a significant shift in labor policy that will have far-reaching effects on the gig economy and other industries. As the implementation date approaches, stakeholders are closely monitoring the developments and preparing for the changes it will bring to the workforce landscape.
