Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Biden administration blocks Trump-era rule affecting gig workers

Stock MarketsMay 06, 2021 12:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: U.S. President Joe Biden speaks about the status of coronavirus disease (COVID-19) vaccinations and his administration's ongoing pandemic response?in the State Dining Room at the White House in Washington, U.S., May 4, 2021. REUTERS/Jonathan E 2/2

By Nandita Bose

WASHINGTON (Reuters) -The Biden administration on Wednesday blocked a Trump-era rule that would have made it easier to classify gig workers who work for companies like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) as independent contractors instead of employees, signaling a potential policy shift toward greater worker protections.

Shares of companies that employ gig labor such as Uber, Lyft and DoorDash immediately pared gains. At 2.15 p.m. ET (1815 GMT) Uber shares traded down 3.2%, Lyft was down 5.8% and DoorDash fell 5%.

"By withdrawing the independent contractor rule, we will help preserve essential worker rights and stop the erosion of worker protections that would have occurred had the rule gone into effect," Labor Secretary Marty Walsh said in a statement.

"Too often, workers lose important wage and related protections when employers misclassify them as independent contractors," he said.

Walsh told Reuters in an interview last week that a lot of U.S. gig workers should be classified as "employees" who deserve work benefits. His comments hurt stocks of companies that employ gig labor.

Walsh said in the interview that his department would have conversations in coming months with companies that employ gig labor to make sure workers have access to consistent wages, sick time, healthcare and "all of the things that an average employee in America can access."

An Uber spokesman acknowledged on Wednesday the current employment system is outdated.

"It forces a binary choice upon workers: to either be 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 "dashers work fewer than four hours per week on average and they overwhelmingly tell us how important the flexibility to earn on their own schedule is to them."

Lyft did not immediately comment.

The U.S. Chamber of Commerce said it hopes the administration does not pursue new regulations that would limit earning opportunities for independent workers. "We are disappointed to see the administration withdraw a balanced rule that was well-grounded in the law and provided certainty to workers and businesses about worker classification."

Others praised the move. The AFL-CIO, one of the country's largest unions, applauded the DOL for getting rid of the rule, "which would have made it easier to misclassify workers."

Gig workers are independent contractors who perform on-demand services, including as drivers, delivering groceries or providing childcare - and are one-third more likely to be Black or Latino, according to an Edison Research poll.

The rule by former President Donald Trump's administration, finalized in early January before he left office on Jan. 20, would have hampered workers' ability to earn a minimum wage and overtime compensation - protections offered under the Fair Labor Standards Act (FLSA).

It was supposed to take effect in March, but did not because it was being reviewed by the Labor Department under President Joe Biden, a Democrat who succeeded the Republican Trump. The withdrawal will be effective on Thursday.

The FLSA includes provisions that require covered employers to pay employees at least the federal minimum wage for every hour they work and overtime compensation at not less than 1-1/2 times their regular rate of pay for every hour they work over 40 in a workweek. FLSA protections do not apply to independent contractors.

"The independent contractor rule was in tension with the FLSA's text and purpose," the Labor Department said.

Biden administration blocks Trump-era rule affecting gig workers
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (8)
Connecticut Yankee
A_Jaundiced_Eye May 06, 2021 1:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm from the Government and I'm here to help you.
Patron Silver
Patron Silver May 05, 2021 3:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
leave these gig guys alone. unions trying to muscle their way back in
Artem Aleksenko
Artem Aleksenko May 05, 2021 10:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
As soneone who worked as a driver for both uber and lyft, it’s a huge mistake to take Union and taxi service campaign contributions and try to make bad policy. Both are dead and ultimately gig economy is what people want. Biden is paradoxically standing in the way of progress
Mad Money
Mad Money May 05, 2021 10:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fake news
Andrew Allen
Andrew Allen May 05, 2021 10:31AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You are making baseless claims of information fraud without any evidence, Mad Money. No one with a brain takes you seriously
albert boulanger
albert boulanger May 05, 2021 10:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
they just threw a wrench in the gears for workers who wanted to stay indepent
albert boulanger
albert boulanger May 05, 2021 10:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the government is here to help.RUN
Tony Coll
Tony Coll May 05, 2021 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"Misclassification" as gig workers. Fairly certain that gig work was the entire point. "Majority" want it to remain gig work, so who is Biden "protecting" exactly? Never met an uber or lyft driver that didn't love the flexibility and casual nature of the job, and I've taken many many rides since 2014. Next thing will be unions, and we know how that ruined taxi service. Everything the government touches turns into trash, and Biden is Oscar the Grouch.
Kaveh Sun
Kaveh Sun May 05, 2021 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biden is protecting tax, unions. Contractors can use all kind of expenses(include food,housing) to write of tax.
Tony Coll
Tony Coll May 05, 2021 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Roger Miller
Roger Miller May 05, 2021 9:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Everyone working two jobs, even temporarily, can blame actions like these. You can’t work more at one employer because goverment rules discourage it. Plus this will limit opportunities for part time temporary employment. Unfair to the ambitious.
Peter Ballsnbush
BoyYeetzWorld May 05, 2021 9:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Destroying America one day at a time
Mart Bab
Rubberduck1973 May 05, 2021 9:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How so? Are Americans not to be protected from misconduct by companies?
Roger Miller
Roger Miller May 05, 2021 9:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Mart Bab Your protection is your freedom to quit and find another job.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email