Department of Labor rule endangers gig work
On Tuesday, the Department of Labor (DOL) published its new rule on employee and independent contractor classification under the Fair Labor Standards Act. While DOL’s rule avoids use of the so-called “ABC test,” the new labor standard could impact the current status of gig workers as independent contractors, threatening their flexibility.
“Forcing gig workers who prefer flexibility to become employees would trigger a serious loss of work and income for millions of Americans,” said Chamber of Progress CEO Adam Kovacevich. “It’s good to see the Biden Administration reject the ABC test, which has proved to be unpopular with voters. But as the Administration finalizes their new rule, it’s important they keep in mind what gig workers want and the economic harms that mass reclassification would have. Rather than holding 21st century work to 20th century standards, we need to think about how to guarantee benefits for all workers without endangering their employment.”
Earlier this year, Chamber of Progress released a new economic analysis finding that a national rule reclassifying gig workers and independent contractors using an ABC test could result in a loss of direct income for approximately 3.4 million American workers. The study, available here, reports that a broad reclassification could cost the nation’s most vulnerable communities more than $31 billion in lost income.
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