A proposed rule by the United States Department of Labor on Tuesday would make it more difficult for businesses to treat workers as independent contractors, a development that is likely to rock up the ride-hailing, delivery, and other industries that rely on gig workers.
The news rocked Gig company stocks, with Uber, Lyft, and DoorDash all plunging at least 10%.
When workers are ‘economically dependent’ on a corporation, they are considered employees and are entitled to more perks and legal protections than contractors, according to the plan. It might have far-reaching consequences for corporate profitability and hiring, household income, and worker well-being.
The final rule is anticipated to be released next year, following a 45-day public comment period that begins on Thursday.
According to the Labor Department, among other things, it will assess the worker’s ‘potential for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the labour is a vital element of the company’s business.’
According to studies, most federal and state labour rules, such as those requiring a minimum salary and overtime pay, only apply to a company’s workers, who can cost up to 30% more than independent contractors.
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