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Trump administration releases rule on distinguishing gig workers from contractors

The new federal rule makes it easier to classify workers as independent contractors

Photo (c) blinow61 - Getty Images
On Wednesday, the Trump administration released its final version of a rule that clarifies the difference between independent contractors and employees who can claim benefits. 

Under the finalized version of the rule, the Labor Department has made it more difficult for “gig-economy companies” to count workers as employees. The federal rule “respects the time-honored American tradition of being your own boss,” Deputy Secretary of Labor Patrick Pizzella said. 

The rule isn’t set to take effect until March 8, well after President-elect Joe Biden takes office. The Biden administration hasn’t said how it plans to handle the bill. Once inaugurated, Biden could decide to change the rule or choose not to defend it in the event that it’s challenged in court. 

Uber considers it a win

Over the years, Uber has strongly advocated to preserve workers’ independent contractor status. The ride-hailing firm has argued that flexible work is a key reason people choose to work for gig-economy companies. 

“Forcing a binary choice upon workers—to either be an employee with more benefits but with less flexibility, or an independent contractor with limited protections—is outdated,” Danielle Burr, Uber Technologies Inc.’s head of federal affairs, told the Wall Street Journal on Wednesday. “We appreciate the efforts made to modernize our nation’s laws.” 

But labor rights groups have already voiced opposition to the plan. The National Employment Law Project, a nonprofit labor rights group, called the rule a “narrowing” of the standards. 

“The rule gives license to employers to call most of their workers independent contractors,” said Catherine Ruckelshaus, general counsel at the National Employment Law Project. “That would dramatically narrow worker protections…in the jobs that particularly need them, including construction, agriculture, janitorial and delivery jobs.”

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