Biden administration blocks Trump-era rule affecting construction workers
By Nandita Bose
WASHINGTON (Reuters) – The Biden administration on Wednesday blocked a Trump-era rule that would have made it easier to classify on-demand workers who work for companies like Uber and Lyft as independent contractors instead of employees, signaling a potential policy change towards greater worker protection. .
Shares of labor-intensive companies like Uber, Lyft and DoorDash immediately squeezed the gains. At 2:15 p.m. ET (6:15 p.m. GMT), shares of Uber traded down 3.2%, Lyft down 5.8% and DoorDash 5%.
“By removing the independent contractor rule, we will help preserve essential workers’ rights and stop the erosion of worker protections that would have occurred had the rule taken effect,” said Labor Secretary Marty. Walsh in a statement.
“Too often, workers lose important wage and related protections when employers mistakenly classify them as independent contractors,” he said.
Walsh told Reuters in an interview last week that many American workers should be classified as “employees” who deserve benefits. His comments hurt the actions of companies that employ workers.
Walsh said in the interview that his department will have conversations in the coming months with companies that employ manpower to ensure that workers have access to consistent wages, sick leave, benefits. health care and “all the things an average employee in America can access.”
A spokesperson for Uber admitted on Wednesday that the current employment system is outdated.
“This forces workers to make a binary choice: to be either an employee with more benefits but less flexibility, or an independent contractor with more flexibility but limited protections.”
He said the company believes it can offer the best of both worlds.
A DoorDash spokeswoman said that “dashers work less than four hours a week on average and overwhelmingly tell us how flexible they are to earn on their own schedule.”
Lyft did not immediately comment.
The US Chamber of Commerce said it hopes the administration will not pursue new regulations that limit income opportunities for the self-employed. “We are disappointed to see the administration withdraw a balanced rule which was well entrenched in law and which provided certainty to workers and businesses on the classification of workers.”
Others praised the decision. The AFL-CIO, one of the largest unions in the country, applauded the DOL for getting rid of the rule, “which would have facilitated the misclassification of workers.”
Construction workers are independent contractors who provide on-demand services, including as drivers, delivering groceries or providing childcare – and are a third more likely to be black or Latino, according to one. Edison Research poll.
Former President Donald Trump’s administration rule, finalized in early January before he left on January 20, reportedly hampered workers’ ability to earn minimum wage and overtime compensation – protections offered under the Fair Labor Standards Act (FLSA).
It was supposed to go into effect in March, but did not because it was under review by the Labor Department under the leadership of President Joe Biden, a Democrat who succeeded Republican Trump. The withdrawal will be effective Thursday.
The FLSA includes provisions that require covered employers to pay employees at least the federal minimum wage for each hour they work and overtime compensation at least 1-1 / 2 times their regular rate of pay for each hour. that they work more than 40 in a working week. . FLSA protections do not apply to independent contractors.
“The independent contractor rule was at odds with the text and purpose of the FLSA,” the Labor Ministry said.
(Reporting by Nandita Bose in Washington; Editing by Heather Timmons, Will Dunham, Howard Goller, Kirsten Donovan)