The Biden administration is proposing a rule that could result in more "gig" workers being considered full-time employees, a potentially major shift in the nation's labor laws that could disrupt ride-sharing, delivery, construction and other companies that employ independent contractors.
The draft rule, to be formally published on Thursday, is a test that the Department of Labor uses when it determines if employers broke wage and hour laws. It formally directs the agency to consider six factors when determining if a worker is an employee — and therefore entitled to minimum wage, overtime and the right to unionize — or an independent contractor, which is essentially a self-employed individual in business for themselves.
"We continue in our enforcement work to identify workers who are not properly classified, in construction, health care, even in restaurants, where we found that dishwasher were improperly classified as independent contractors to avoid paying them overtime," Jessica Looman, principal deputy wage and hour administrator with the Labor Department, told reporters on Tuesday.
After the Labor Department proposal is published, the rule will remain open for public input for 45 days, officials said.
Independent contractors are typically much cheaper to hire since they are responsible for their own payroll taxes and don't qualify for overtime or minimum wage.
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