Biden govt bring in law to classify gig workers as regular employees

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The Biden administration has proposed to bring in a new law to classify thousands of independent workers as regular employees—a move that could shake up the ride-hailing and delivery companies, and other app-based industries who primarily rely on gig workers.

Under the proposed law, which has been unveiled by the Labor Department on Tuesday, these gig workers would be treated on par with the regular employees and would be entitled to a minimum wage, overtime, and contributions to unemployment insurance.

The new proposal would work on the principle of “totality-of-the circumstances” to analyse all of the factors involved in the working relationship equally.

The department has said that it will use multi-factor economic realities, such as job permanency, how much control workers have over their work and how many opportunities they are given to increase their earnings, among other factors, for determining the working relationship between the employer and gig workers.

“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors,” labour secretary Martin J. Walsh said in a statement.

“Misclassification deprives workers of their federal labour protections, including their right to be paid their full, legally earned wages.”

Recently, Uber and Lyft have claimed in federal filings that they would be forced to alter their business models if they start treating their drivers as employees, according to the New York Times.

They stated that labour costs would rise 20 to 30 per cent if gig workers are given all the benefits of a regular employee.

The proposal will be published in the Federal Register on October 13 and the public will have 45 days to comment on it.

(With inputs from agencies)

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