Tag: independent contractors

Commentary: Labor Department’s New Rule Is Bad News for Independent Contractors

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Contract Worker

In what is sure to have significant implications for millions of American workers, specifically gig economy workers and contractors, the Department of Labor (DOL) issued its long-awaited final worker classification rule in January.

The new rule revises the process to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act. The government argues the rule is necessary to ensure that all workers are provided fair wages and overtime since independent contractors (people who work for themselves or a business on a contractual basis) are not given the same benefits, such as tax withholdings and paid time off, as traditional employees. However, this argument appears designed to mask the government’s true intention, which is to reduce the number of independent contractors in the country.

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Commentary: New Biden Labor Dept. Rule Likely to Hurt Millions of Small Businesses, Independent Contractors

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Remote Worker

Some 99% of American companies are small businesses, and 100% of businesses started out small, but a recently finalized rule from the Biden administration’s Labor Department will make it harder for small businesses to start, grow and succeed.

As of last May 1, a White House news release pointed out, “Young firms, which often start small with few employees, are a driving force in job creation.” That’s been particularly true since the COVID-19 pandemic, as small businesses with fewer than 50 employees have accounted for a growing share of new jobs.

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Biden Admin Releases New Labor Rule Cracking Down on Independent Contractors

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Remote Worker

The Department of Labor announced Tuesday the final version of a rule that will force companies to recognize some workers as employees instead of independent contractors.

The new rule goes into effect on March 11 and rescinds a previous rule establishing independent contractors as a separate class of workers under the Fair Labor Standards Act that was put in place in January 2021 under the Trump administration, according to the DOL release. The rule could raise labor costs by up to 30% for employers who utilize independent contractors, such as app-based services like Uber or Lyft, which offer a freelancing model, as employers would have to adhere to minimum wage and overtime laws, according to Reuters.

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Biden’s Labor Department Is Planning to Shake Up a Key Rule for Gig Workers

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The Department of Labor on Tuesday announced a proposed change to rules governing independent contractors that could re-classify millions of gig workers as full employees, dramatically increasing their chances to obtain certain benefits.

The Labor Department repeatedly characterized the move as a way to reduce “misclassification” of workers who deserved to be counted as employees in a document explaining the rule change. If the new rule is approved, millions of workers that do not currently qualify for minimum wage, overtime, Social Security contributions and other benefits, could see their standing reconsidered, according to The New York Times.

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California’s New Pro-Union Law Could Grind the Supply Chain to a Halt

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California truckers are protesting across the state to express their disapproval of Assembly Bill (AB) 5, a new law backed by unions that reclassifies them as employees rather than independent contractors and could send shockwaves through an already-stressed supply chain.

The regulation was partly enacted to protect gig workers at companies like Uber and Lyft that hire independent contractors in large numbers without affording them the benefits given to employees, but will complicate or render illegal the current employment status of many of California’s approximately 70,000 independent truck owner-operators, The Wall Street Journal reported. The law will likely force some truckers out of the industry, thus lowering shipping capacity and raising prices for transporting cargo in the Golden State at a time when California ports have already experienced major supply-chain bottlenecks during the COVID-19 pandemic, CalMatters reported.

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JC Bowman Commentary: Government Needs Oversight and Transparency

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It is a disturbing trend to hire outside consultants or independent contractors, with little direct oversight, to perform government jobs, whether nationally or statewide. The running joke is “if you have an out-of-state license plate on your car and drive by slowly at the Tennessee Department of Education, they will throw a contract in your car, and you too can be an education consultant.” Now that is probably not very accurate or fair, but then again, I have a Tennessee tag on my car and I have been known to drive a little fast.

It is likely that the majority of consultants and contractors follow our state laws and maintain the necessary integrity. However, all Tennesseans should be somewhat concerned by a contracting process if it has little or no accountability. We must also do a better job of tracking performance data. Especially when we are using tax dollars in Tennessee to contract with people outside the state. Oversight is critical to making sure taxpayers are getting what they are paying for.

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