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Biden Gig Workers Labor Standards
ASSOCIATED PRESS

New labor rules aim to offer gig workers more security, though some employers won't likely be happy

The Biden administration has enacted a new labor rule that aims to prevent the misclassification of workers as independent contractors

By DAVID HAMILTON and ALEXANDRA OLSON
Published - Jan 09, 2024, 06:03 AM ET
Last Updated - Jan 09, 2024, 06:03 AM EST

The Biden administration on Tuesday enacted a new labor rule that aims to prevent the misclassification of workers as “independent contractors,” a step that could bolster both legal protections and compensation for many in the U.S. workforce.

The Labor Department rule, which the administration proposed 15 months ago, replaces a scrapped Trump-era standard that lowered the bar for classifying employees as contractors. Such workers neither receive federal minimum wage protections nor qualify for employee benefits, such as health coverage and paid sick days.

The changes have long been viewed as especially bad news for companies like Uber and DoorDash — pioneers of the so-called gig economy, in which companies essentially rely on armies of freelance drivers, delivery people and others to provide services without traditional labor protections. Some gig workers say they prefer things this way, extolling the freedom to set their own hours and schedules. But others complain of exploitation by the companies.

Financial markets appeared to shrug off leaked news of the agreement on Monday. Shares of Uber and Lyft, which dropped 10% and 12% respectively when the administration unveiled the proposed rules in October 2022, rose 2.5% and 5.8% on Monday.

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