WASHINGTON, D.C.—The Biden administration canceled a Trump-era labor rule that would have made it easier for workers to be classified as independent contractors.
The Biden Department of Labor (DOL) issued a final rule today rescinding the rule issued in the final weeks of the Trump administration that brought needed clarity to determine whether a worker should be classified as an employee or independent contractor by offering a simplified two-factor test. The Biden DOL will return to the previous seven-factor test in an effort to crack down on independent contracting in the gig economy.
An estimated 57 million Americans are currently freelancers, and nearly half of them are women. If not for independent contract work, many of these workers would be out of the workforce because their personal circumstances limit their ability to work as traditional employees. DOL’s proposed rule comes at a time when unemployment remains high due to COVID-19 and compounds efforts by Congress and states such as California to discourage independent contract work.
Patrice Onwuka, director of the Center for Economic Opportunity at Independent Women’s Forum, issued the following statement:
This is a stunning blow for our nation’s independent workers. Over 57 million people freelance, and the majority of independent contractors choose this work arrangement for the flexibility it provides. This is especially devastating for working mothers who depend on independent, flexible work to earn while still filling other roles.
By undoing the Trump administration’s needed efforts to protect independent contractors, President Biden is turning his back on hardworking independent workers in favor of union bosses. If he wants to combat the gender inequality brought on by the pandemic, he would embrace alternatives to the outdated 9-5 work model.
As part of the workforce campaign Chasing Work, IWF interviews and produces written profiles and mini documentary videos of individuals negatively affected by AB5 and other restrictions on worker freedom and flexibility. To learn more, visit: www.iwf.org/chasing-work.
Independent Women’s Forum is dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities.