President-elect Donald Trump’s recent appointment of Keith Sonderling as his deputy labor secretary has sparked interest and concern among employers in the gig economy. Sonderling, who previously served as Trump’s acting administrator of the Department of Labor’s wage and hour division and as a Republican commissioner on the Equal Employment Opportunity Commission (EEOC), is seen as an ally for employers in this sector.
The gig economy, characterized by short-term contracts and freelance work, has been a topic of debate for years, especially regarding the classification of workers as independent contractors or employees. Sonderling’s past actions, such as issuing an opinion letter in 2019 that classified workers of a virtual marketplace as independent contractors, have been welcomed by gig companies and their lawyers. This letter, although not legally binding, can serve as persuasive material in court cases involving worker classification.
The classification of gig workers is a crucial issue, as misclassifying them can result in significant financial losses for workers, as much as $18,000 per year in income and job benefits according to the Economic Policy Institute. Additionally, independent contractors often lack basic protections such as overtime pay and unemployment insurance, and may earn less than the minimum wage.
Under the Biden administration, there have been efforts to reverse Trump-era rules that made it easier for companies to label workers as independent contractors. This has led to legal battles and uncertainty for both employers and workers in the gig economy. Fisher Phillips, a law firm specializing in labor and employment issues, has advised employers to prepare for potential shifts in federal rules while considering state laws.
Recent rulings in states like California and Pennsylvania have upheld the classification of gig workers as independent contractors, while other states have implemented laws that offer some benefits to workers without classifying them as employees. The ongoing legal battles and regulatory changes have created a complex landscape for gig companies and their workers.
Sonderling’s tenure at the EEOC and his advocacy for more guidance on the use of artificial intelligence highlight the evolving nature of labor laws and regulations in the gig economy. His departure from the EEOC in August marked the end of his term, leaving behind a legacy of advocating for employers’ interests in this rapidly changing sector.
Overall, the appointment of Keith Sonderling as deputy labor secretary under the Trump administration signals a shift in labor policies that could have far-reaching implications for the gig economy. As the debate over worker classification continues, both employers and workers in this sector will need to stay informed and adapt to the changing regulatory landscape.
