On Tuesday, the Biden administration said it would take steps to redefine how the federal government distinguishes between employees and contractors, a proposal that could allow millions of so-called gig workers to demand workplace rights.
While the agency was under Republican control, the Department of Labor issued a notice of rulemaking that seeks to reverse guidelines approved in January 2021.
The department relies on certain guidelines to determine which workers it considers contractors by weighing two factors: how much control a worker has over when and how often they work, and how much they are responsible for creating their own profits and investing in their own materials.
The Labor Department tried to stop the rules from being enacted after Biden's inauguration, but believes they don't fit with the purpose of the Fair Labor Standards Act.
Equal consideration of other factors, such as whether the work being performed is important to the employer's business, is required in order to realign the rules with labor laws.
The changes could hurt companies whose workforces are mostly comprised of gig workers who aren't entitled to paid sick leave or unemployment insurance.
Two years ago, the companies contributed hundreds of millions of dollars to help pass a ballot initiative in California that exempts app-based delivery services from providing benefits to workers.
The department wants to know if the worker is dependent on the employer for work or if they are in business for themselves.
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