President Joe Biden’s Labor Department on Wednesday overturned a Trump-era rule that would have made it easier for companies to classify workers as independent contractors instead of employees under the federal Fair Labor Standards Act ( FLSA).
“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 come into 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 signaled a change in policy and hurt the actions of companies such as Uber Technologies Inc and Lyft Inc which employ labor.
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.
Walsh said in the interview that his department will have conversations in the coming months with companies that employ manpower to ensure workers have access to consistent wages, sick leave, and sick leave. to health care and “all the things an average employee in America can access.”
The rule in President Donald Trump’s administration, finalized in early January before stepping down on January 20, reportedly hampered workers’ ability to earn minimum wage and overtime compensation – protections offered by the FLSA.
It was supposed to go into effect in March, but was not because it was under review by Biden’s labor department. The withdrawal will be effective Thursday.
A spokesperson for Uber said last week that an overwhelming majority of app-based workers want to remain self-employed because it allows them to work when, where and how they want, with flexibility that no traditional job does. cannot match.
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 Ministry of Labor said.