Biden DOL Finalizes Independent Contractor Rule to 'Help Protect Workers'
JESSICA CORBETT for Common Dreams
Democrats in Congress and unions were among those applauding on Tuesday as the U.S. Department of Labor announced its final rule to provide guidance on when employers can treat workers as independent contractors under the Fair Labor Standards Act.
"Misclassifying employees as independent contractors is
a serious issue that deprives workers of basic rights and protections,"
acting Labor Secretary Julie Su said in a statement. "This rule
will help protect workers, especially those facing the greatest risk of
exploitation, by making sure they are classified properly and that they receive
the wages they've earned."
Welcoming the rule—set to take effect in March—the Teamsters
said on social media that "it's long past time for American employers to
recognize and respect their employees, to stop exploiting loopholes to pay
workers less and deprive them of benefits, and to honor every worker's right to
organize and collectively bargain a union contract."
Economic Policy Institute (EPI)
president Heidi Shierholz highlighted that the rule rescinds a Trump-era policy and, like
Su, stressed how
"employer misclassification of workers as independent contractors robs
workers of labor rights and threatens their economic security."
"Many workers are harmed by employer misclassification—particularly those in the lowest-wage and most difficult jobs, such as nail salon workers, truck drivers, and construction workers," Shierholz said.
"A previous EPI analysis found that in 11 commonly
misclassified occupations, workers misclassified as independent
contractors lose out on thousands of dollars in earnings and benefits per year,
compared with workers doing the same job with employee status."
"Since this rule was proposed, opponents of this rule have waged an all-out misinformation war, claiming that independent entrepreneurs and business owners will now be forced into employee status against their will," the economist noted.
"The reality is that if the
Trump administration's rule was allowed to stand, workers with far less power
to actually set the terms and conditions of their employment—not bonafide
contractors—would have continued to lose out on basic worker protections, earnings,
and benefits to which they should be entitled."
The Washington Post reported Tuesday
that "the rule is expected to face an onslaught of legal challenges from
companies. It has faced extensive criticism from businesses and industry
groups, including those representing Uber, Lyft, DoorDash, and other ride-share
and delivery platforms. But labor officials say they have carefully considered
possible litigation and are confident that the rule would withstand a court
challenge."
Some Republicans in Congress are already taking aim at
the policy, with U.S. Senate Committee on Health, Education, Labor and Pensions
(HELP) Ranking Member Bill Cassidy (R-La.) threatening to challenge it under the
Congressional Review Act.
Meanwhile, Senate HELP Committee Chair Bernie
Sanders (I-Vt.), a longtime labor rights advocate, praised the administration's new move
to "stop unscrupulous employers from deliberately misclassifying their
workers and cheating them out of hard-earned wages," adding that
"when 60% of Americans live paycheck-to-paycheck, workers need labor laws
that protect them, not allow them to be ripped off."
Congressional Progressive Caucus (CPC) Chair Pramila Jayapal (D-Wash.) also offered
praise, saying that
"I am thrilled to see the Biden administration continuing to put its
pro-worker commitment into action with this new final rule."
"With gig work playing a larger role in our economy,
it's more important than ever that workers are protected under federal law and
have access to all the rights to which they're entitled," she said.
"This new policy will ensure that the
workers who have fallen through the cracks—from rideshare and delivery drivers
to janitors and home care workers—will finally be able to access Social
Security benefits and unemployment insurance and be guaranteed overtime and
minimum wage pay."
"The rule is also an essential check on large, wealthy
corporations who have skirted their obligations to these workers even as their
labor makes the companies" profits possible," she continued, adding
that the CPC looks forward to working with President Joe Biden and Su to ensure
it "is implemented fairly and equitably across the country and
industries."
The department's announcement came a day after Biden renominated Su
as labor secretary—a decision also celebrated by progressives, including
Jayapal and Sanders, who called on the Senate to stop stalling.
"Julie Su has spent her career as a dedicated public
servant, fighting tirelessly for working people, especially the lowest-wage
workers, domestic workers, immigrant workers, and workers of color,"
Jayapal pointed out.
"She deeply understands how the Department of Labor should work and the
needs of our modern economy."
"There is so much work still to do to raise wages,
lower costs, and fight for the working people of this country, and we need
Labor Secretary Su to achieve it," the CPC leader added. "We urge the
Senate to move swiftly and finally confirm this extremely qualified
nominee."
Sanders said that
"I strongly support Julie Su's renomination to serve as Secretary of
Labor. Her strong pro-worker track record as acting Secretary shows beyond a
shadow of a doubt that she is the right person for the job. Her tireless and
consistent work for working families across the country should continue as
secretary of labor and I urge my colleagues to support her nomination."