In October, the Biden Administration issued a highly anticipated proposal on how it will approach independent contractor status under federal wage law. The proposal, released by the US Labor Department, clarifies when workers should be classified as independent contractors or be classified as employees who are afforded many more rights, such as full minimum wage, overtime, and other protections provided under the Fair Labor Standards Act.
This is a potential game changer for millions of gig workers, who are often classified as independent contractors. This includes the quintessential Uber drivers and food delivery app drivers, but construction and agriculture have some of the largest representation of independent contractors in the country.
When this was announced, gig companies such as Uber Technologies Inc. and Lyft Inc. worried about what this will do for their company, as stock prices took a tumble after the announcement. These businesses say their operating costs would skyrocket if they were broadly required to reclassify their independent contractors as employees, due to the tax liabilities and minimum wage, labor, safety, and other legal requirements that apply to employees.