By: Sam Rutzick featuring IWF Senior Policy Analyst Patrice Onwuka

A proposed new rule from the Department of Labor will protect the flexibility and freedom enjoyed by gig workers and independent contractors, but it likely won’t settle the debate over how those workers should be classified.

The Labor Department’s new proposed rule, issued on September 22, is a reaction to California’s recent legislation in the other direction. Assembly Bill (A.B.) 5, a California labor law passed in 2019, imposed a three-part “ABC” test to determine if someone is an employee or an independent contractor. Essentially, unless someone can prove that they are free to not work, that they perform work outside of the course of their employers’ usual business, and that they usually work in an independent business in the same field as whomever hired them, they count as an employee.

“I think it’s a win for independent contractors,” says Patrice Onwuka, a senior policy analyst at the Independent Women’s Forum. “It would really bring clarity to what is the most basic employment question.”

Currently, the federal government doesn’t have a strict definition of what a contractor is,  as opposed to an employee. Each agency and state at present “have their own test on what is an independent contractor,” according to Onwuka. It’s the courts who have been the arbiters.

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