Department of Labor

Department of Labor Proposes New Rule Protecting the Right To Be a Gig Worker

In a reaction to California's Assembly Bill 5, the Department of Labor's new proposed rule will make it harder for gig workers to be defined as employees

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A proposed new rule from the Department of Labor will protect the flexibility and freedom enjoyed by gig workers and independent contractors, but it likely won't settle the debate over how those workers should be classified.

The Labor Department's new proposed rule, issued on September 22, is a reaction to California's recent legislation in the other direction. Assembly Bill (A.B.) 5, a California labor law passed in 2019, imposed a three-part "ABC" test to determine if someone is an employee or an independent contractor. Essentially, unless someone can prove that they are free to not work, that they perform work outside of the course of their employers' usual business, and that they usually work in an independent business in the same field as whomever hired them, they count as an employee.

This was a devastating blow to a whole variety of industries, from delivery and ridesharing services to journalism, photography, and even opera. Uber and Lyft nearly pulled out of California entirely and Vox Media severed ties with hundreds of freelance journalists.

The new rule "is definitely a reaction" to the California law, says Sean Higgins, a research fellow at the Competitive Enterprise Institute. The Labor Department's proposal "goes back to the nuts and bolts of the federal definition of what a contractor is," Higgins says, "and just sort of updates it and gives it a facelift."

There are new considerations for determining if someone is a contractor, like whether a person can get identical work from other employers—Uber and Lyft have the same sort of work and contractors can drive for both. There's also consideration given to whether and how individual initiative affects a worker's compensation. The Labor Department advises "that the actual practice is more relevant than what may be contractually or theoretically possible." It emphasizes flexibility and reasonableness.

"I think it's a win for independent contractors," says Patrice Onwuka, a senior policy analyst at the Independent Women's Forum. "It would really bring clarity to what is the most basic employment question."

Currently, the federal government doesn't have a strict definition of what a contractor is,  as opposed to an employee. Each agency and state at present "have their own test on what is an independent contractor," according to Onwuka. It's the courts who have been the arbiters.

The rule is being pushed through the new rule proposal process with only a 30-day public comment period, rather than the typical 60 days. "[The Department of Labor] wants to get this done now, while there is still time left on the calendar," Higgins says.

With Election Day less than six weeks away, the Trump administration is operating on a ticking clock. Under the Congressional Review Act, Congress has 60 days following the publication of a proposed rule to issue a joint resolution to dismiss it; the Department of Labor needs to get the rule finalized before November 20 to avoid having it dismissed by a possible Democratic Senate majority in January.

Even if the Trump administration beats the clock, the rule could be rescinded or replaced by an incoming Democratic administration, leaving gig workers saddled with uncertainty.

NEXT: The Legal Response to Breonna Taylor's Death Shows How Drug Prohibition Transforms Murder Into Self-Defense

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  1. If you like you job you can keep your job…. Hahaha hahaha I couldn’t say that with a straight face. How about
    If you like your company you can keep your company…
    Hahahahahahahahaha
    Nope couldn’t do that one eighter.

    1. If you like your freedom, you can keep your freedom?

    2. I can think of some guys who would like that standard applied to wives.

    3. I Make Money At H0me.Let’s start work offered by Google!!Yes,this is definitely the most financially rewarding Job I’ve had . Last Monday I bought a great Lotus Elan after I been earning $9534 this-last/5 weeks and-a little over, $10k last month . . I started this four months/ago and immediately started to bring home minimum $97 per/hr

      Heres what I do……………………………………………… More INformation Here

  2. How about a rule that says “If you decide you’re a gig worker, then you’re a gig worker”?

    1. Identifying as a gig worker… I like where this is going.

      1. I quit working at shoprite and now I make $65-85 per/h. How? I’m working online! My work didn’t exactly make me happy so I decided to take a chance on something new…ACs after 4 years it was so hard to quit my day job but now I couldn’t be happier.

        Here’s what I do…>> Click here

    2. If you like your contract, you can keep your contract.

    1. You win the internet today!

  3. How about we outlaw employee status and make everyone become a contract laborer?
    Gets rid of all company benefits, everyone has their own fully portable benefits including health insurance that they actually want (no maternity coverage for single men, no prostate coverage for women).
    The only thing distinct about employee status is that the feds know they will get their taxes ahead of tax day.

    1. That’s not even an advantage for the government as businesses have to prepay expected taxes.

      If you were an individual corporation, the government would get it’s tax money *early*.

      1. Well, ‘prepay’ is a relative term in that case.
        The lead time to remit withheld payroll taxes, and the matching employer amounts varies from days to months depending on the amount of the haul for Uncle Sam.
        Corporate income taxes are paid after the fact as well, but again, the amount of delay is based on amounts.
        When I was an individual corporation, I paid all taxes, including estimated profit taxes, quarterly.
        (disclaimer: this was a long time ago; your laws may vary)

  4. I am sure that Biden/Harris would kill my freelance gig if they could. Good to see somebody out there standing up for us.

    1. Democrats destroy everything they touch. Just get rid of their party.

      1. If they refuse to accept the results of this election like they did the last, they may well disappear.

      2. So you’re saying we need to convince Democrats to touch themselves?

  5. “The only thing distinct about employee status is that the feds know they will get their taxes ahead of tax day.”

    And since they’re addicted to the interest free loan they get every year there’s 0% chance of your idea happening. I like it though.

  6. Well this will make ENB happy that hookers, pimps, strippers, drug dealers, and other fine Americans will be able to get their gig back.

  7. Politically, this might be a mistake for the GOP.

    There aren’t many things that might make the bulk of the residents of L.A. County (home to over 100% of Hillary’s popular vote margin of “victory” in 2016) question their blind allegiance to “progressive” religious dogma, but having to go back to living without grubhub, doordash, instacart and any other service that allows them to get lunch without having to go get lunch might actually do the trick for a lot of them.

  8. BTW, the ads in favor of Prop 22 (making drivers contractors again) are very well done. No shouting, just interviews with drivers.
    I’ve yet to see an anti-22 ad, but I’m sure the SEIU has some in store.

  9. I Make Money At H0me.Let’s start work offered by Google!!Yes,this is definitely the most financially rewarding Job I’ve had . Last Monday I bought a great Lotus Elan after I been earning $9534 this-last/5 weeks and-a little over, $10k last month . . I started this four months/ago and immediately started to bring home minimum $97 per/hr

    Heres what I do CLICK HERE FOR FULL DETAIL

  10. Um, what am I missing? The DOL can do this, but all it would do is control who would be deemed an employee under federal law; it would not affect California’s (or any state’s) ability to deem someone an employee for state labor law purposes.

  11. Should be called the workers freedom act.

  12. Are you Jew? You need to take the Jew Test! If you’re Jew; it’s off to the DNC labor union with you!

  13. This story should be shouted form every rooftop across the country. It seems that progressives have a kind of willful ignorance when it comes to supporting a party that actively works against the things that they value — in this case, easy access to affordable transportation and delivery services. The message needs to be blasted into their heads that they are supporting politicians that would take that away as a favor to their union donors.

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