Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Lyft driver

Kasey St. John connects with a Lyft driver at the rideshare lot at Los Angeles International Airport on August 20, 2020 in Los Angeles. (Photo: Al Seib/Los Angeles Times)

Biden Labor Rule Aims to Help End Gig Company 'Exploitation' of Workers

"All work has value, all workers deserve fair compensation and legal protections from exploitation on the job," said one labor union in response to the rule.

Julia Conley

The millions of workers whose labor is central to the success of large companies like Uber and Lyft will have more protections and rights under a new rule proposed Tuesday by the Biden administration, which takes aim at corporations that misclassify workers as independent contractors.

U.S. Labor Secretary Marty Walsh announced the administration's proposed rule, which would establish a "multifactor, totality-of-the-circumstances" framework under the Federal Labor Standards Act to determine whether a worker is truly an independent contractor—a status which exempts people from minimum wage and overtime laws as well as tax contributions from their employers.

"Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages."

Under the proposed framework, when classifying people as employees or independent contractors, companies would be required to consider whether the work being performed is essential to their business and whether a worker has to make large investments—such as buying and maintaining equipment—in order to do their job.

The Labor Department said the rule would restore a standard that was originally proposed by the Obama administration and which federal courts have upheld despite former Republican President Donald Trump's weakening of the rule.

"While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation's most vulnerable workers," said Walsh. "Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages."

Under Trump, employers were directed to consider the extent to which they controlled how a worker performs their job and whether a worker has the opportunity to control how much they earn rather than just earning a steady wage.

Companies including Uber and Lyft have aggressively lobbied to be able to classify more of their workers as independent contractors. After California lawmakers passed Assembly Bill 5 in 2019, classifying at least a million workers in the gig economy as employees, the companies spent about $200 million to pass a ballot measure to limit benefits for the workers their business models rely on and exempt them from employee status.

The proposed rule "could bring an end to gig companies' exploitation of millions of workers," said national economic justice group Jobs With Justice.

"All work has value, all workers deserve fair compensation and legal protections from exploitation on the job," said Council 4 AFSCME, a union of 30,000 state and local government workers affiliated with the American Federation of State, County and Municipal Employees in response to the rule.

The Labor Department's announcement follows an executive order signed by President Joe Biden to require federal contractors to pay a minimum of $15 per hour, his vocal support of union organizers at Amazon, and his push for an infrastructure law and the Inflation Reduction Act, which are expected to create hundreds of thousands of union jobs.

"In rules, orders, and appointments," said Institute for Policy Studies associate fellow Michael Paarlberg after the gig economy rule was announced, Biden "is miles ahead of any past Democratic president in a generation."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

'Cleaner Air Is Coming' as London Expands Vehicle Pollution Fee to Entire Metro Area

"Around 4,000 Londoners die prematurely each year because of long-term exposure to air pollution, with the greatest number of deaths in outer London boroughs," noted Mayor Sadiq Khan in announcing the expansion.

Brett Wilkins ·


'Amazing News': Historic Shark Protections Approved at Global Wildlife Convention

Up to 90% of sharks targeted by the lucrative fin trade will now be protected, said one advocate.

Julia Conley ·


'The Nightmare Materializes': Far-Right Extremist Itamar Ben-Gvir to Be Israel's National Security Minister

The Foreign Affairs Ministry of the Palestinian Authority said Ben-Gvir's elevation to national security minister could have a "catastrophic impact on the Israeli-Palestinian conflict."

Jake Johnson ·


Raging Wars, Soaring Hunger Put Women and Girls in Crosshairs, Warns UN

"A toxic mix of crises—conflicts, climate, skyrocketing costs, and the ripple effects of the Ukraine war—are inflicting a devastating toll on the forcibly displaced. This is being felt across the world, but women and girls are particularly suffering."

Brett Wilkins ·


Greta Thunberg Joins 630+ Young People in Landmark Climate Lawsuit Against Sweden

"The Swedish state fails to meet the constitutional requirement to promote sustainable development leading to a good environment for present and future generations," said the plaintiffs.

Julia Conley ·

Common Dreams Logo