U.S. Labor Dept Opens New Front in Battle Over 'Gig' Workers

The DOL is preparing to adopt new regulation to prevent employers from misclassifying workers as "independent contractors" to avoid paying minimum wage and overtime.

The U.S. Department of Labor is beginning the rulemaking process to adopt a new rule to clarify who can be classified as an “independent contractor” under the Fair Labor Standards Act (FLSA).

The DOL will hold public forums this month to hear from employers (June 24) and workers (June 29) who are affected by employee or independent contractor classification.

It’s part of a comprehensive campaign by the administration of Democrat Joe Biden to ensure that workers receive workplace protections afforded to “employees” in the FLSA, including a guaranteed minimum wage and overtime pay.

Gig workers are classified as “independent contractors” and are excluded from U.S. labor market regulations, enforcement and various programs administered by the DOL. They also have no right to unionize. Moreover, employers who misclassify employees as “independent contractors” receive a competitive advantage over employers who follow the law.

Back At Square One

The DOL under ex-GOP Pres. Donald Trump published a new rule in January 2021 that made it easier to classify workers as independent contractors. The Biden administration delayed and then withdrew the rule in May 2021. Biden’s DOL was forced to reinstate the rule when a federal judge in Texas ruled the agency failed to give the public a meaningful opportunity to comment prior to the withdrawal of the rule.

So the DOL is back at square one.