Biden’s Labor Dept. facing growing pushback against ‘disastrous’ rule that ‘threatens the gig economy’

A new rule from the Biden administration’s Department of Labor (DOL) is set to go into effect on Monday, and, according to workers, small business owners, advocates, trade groups, and lawmakers, it will put the very people it claims to protect in jeopardy.

According to Fox Business, “The DOL’s rule would make it more difficult for companies to classify their workers as independent contractors — a change that could have major consequences for ride-hailing, delivery and other industries that depend heavily on gig workers.”

California radio and vodcast host Mike Netter stated on X that the proposed rule is “partially modeled on California’s disastrous AB5 law that obliterated tens of thousands of jobs overnight.”

“In January, the Department of Labor, headed by Acting Secretary of Labor Julie Su of California pandemic fraud/AB5 infamy, proposed a federal rule that would gut freelance and gig workers right to remain freelancers and gig workers,” Netter, who pushed for the recall of California Governor Gavin Newsom, explained. “The rule, partially modeled on California’s disastrous AB5 law that obliterated tens of thousands of jobs overnight, seeks to reclassify many freelancers as actual employees of the firms they contract with.”

“Su has claimed this rule is fair and proper because ‘misclassified employees don’t get paid for all of their hours,'” he continued. “But the new rule does not take into account the fact that most freelancers specifically choose to be freelancers to be able to set their own schedule and pick and choose for whom and on what they will work.”

“After the law’s passage, California’s legislature passed over 100 exemptions for industries impacted by the law, as professionals from independent truckers to freelance writers decried its negative impacts,” Fox Business reports.

“So far, at least five lawsuits have been filed against the Biden administration to stop the rule,” according to the outlet. “The latest challenge came earlier this week from trade groups including the U.S. Chamber of Commerce, whose suit follows separate pending challenges filed by freelance writers and a trucking company.”

Meanwhile, House Republicans warned the reclassification of workers rule “threatens the gig economy and jeopardizes the ability of 27 million Americans to work as independent contractors.”

“Sen. Bill Cassidy, R-La., and Rep. Kevin Kiley, R-Calif., introduced a joint Congressional Review Act (CRA) resolution Wednesday aimed at overturning the rule,” Fox Business reports.

Cassidy blasted the rule in a January Fox News op-ed.

“The regulation attempts to achieve the goals of a policy California implemented called an ‘ABC test,’ a burdensome process that makes it essentially impossible for businesses to prove their workers are independent contractors and not direct employees, even if the workers themselves do not want to be classified as employees,” Cassidy wrote. “The Department of Labor has not estimated how many millions of individuals would be impacted by their new rule losing their livelihoods but the experience of independent contractors in California is illustrative of what can happen at the federal level.”

The California law, he said, “is deeply unpopular across the political spectrum in California” with 59 percent of Californians voting to “further weaken the bill.”

“Forcing this troublesome regulation onto Americans nationwide is the wrong move,” the lawmaker stated. “However, the Biden administration’s push to eliminate independent contracting should not come as a surprise.”

Joining the growing opposition is Save Independent Work (SIW), a coalition of independent workers and advocacy groups that battled against AB5 in California.

“With 18,500 members in my group Freelancers Against AB5, I’ve had a front-row seat to thousands of stories of lost livelihoods since AB5 was first signed into law by Gov. (Gavin) Newsom in September 2019,” SIW member and the founder of Freelancers Against AB5, Karen Anderson, said. “Within our membership, we’ve identified more than 600 categories of professions affected by this destructive, disruptive and cruel law.”

“Like AB5 in California,” Anderson explained, “the new DOL rule is a one-size-fits-all policy that jeopardizes self-employment across a vast swath of professions, everyone from indie-film producers, event planners and healthcare professionals, to transcribers, writers, truckers and tutors.”

When she announced the classification rule change, Acting Labor Secretary Julie Su insisted the DOL is protecting exploited workers by bringing consistency to all entities covered by the Fair Labor Standards Act.

“Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections,” Su said in a statement at the time. “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.”

Nature photographer Kristen Davis would disagree.

“We are being forced to the streets,” Davis wrote on X. “Literally.”

“Covtardia’s number one thing about ‘no in person’ was to destroy art shows, any anything that people could do big or small in the world of art that was not ‘Hollywood elite’ protected.”

Another user on X called the DOL rule a “money grab.”

 

 

Melissa Fine

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