Labor Department Floats New Rule for Gig Worker Classification

The Labor Department proposed a rule Tuesday to establish more stringent requirements for employers classifying workers as independent contractors, which could have implications for the gig economy and companies like Lyft and Uber. Worker misclassification is becoming more common, particularly with the “most vulnerable workers,” Labor Secretary Marty Walsh said. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.” The proposal would rescind the 2021 independent contractor rule, and restore a “multifactor, totality-of-the-circumstances analysis to determine whether a worker is an employee or an independent contractor” under the Fair Labor Standards Act, the department said. The new rule would “stifle the growth of the gig economy and potentially force many employees who set their own schedules as independent contractors to become employees,” Sen. Mike Braun, R-Ind., said in a statement. The FTC issued a party-line policy statement in September outlining enforcement priorities against unfair, deceptive and anticompetitive practices involving the gig economy (see 2209150071).