Gig economy workers should be classified as employees, says Department of Labor

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Gig economy workers should be classified as employees, says Department of Labor

The U.S. Department of Labor, led by Secretary Marty Walsh, supports strengthening the workers' protections and potentially also wants to classify full-time workers as gig economy employees.

A spokesperson for the Department of Labor confirmed that Walsh said in a statement to FOX Business on Thursday he believed many gig workers should be considered employees after a report from Reuters.

The Secretary was reaffirming that misclassification is a pervasive issue that impacts both the economy and workers, the spokesperson explained. Worker protections under federal law provide a safety net of security and benefits that provide ladders of opportunity into the middle class. This safety net should be strengthened further. As our recovery continues, we should support the employer-employee relationship and all the opportunities it offers.

The purpose of this policy is to prevent workers from being wrongly classified as basic contractors and thereby deprived of independent labour protections and benefits as a result.

Reuters first reported on Thursday that Walsh supported classifying gig workers as employees.

We are looking at it, but in some cases they should be treated like employees and I think it has to be uniform across the board, Walsh told the publication, as confirmed by the Department of Labor spokesperson. These companies are making profits and e-commerce, and I don't begrudge anyone for that but we want to make sure that the success trickles down to the workers.

The report from Reuters tumbling shares of Uber and Lyft during the trading session were just two of the many companies that rely on independent workers to deliver on-demand services for people who are in their 20s.

In addition to e-share companies, the trucking industry has opposed the policy saying it would put owners out of work.

In January 2020 California, California implemented a law known as AB 5 that made it more difficult for companies to classify workers as independent contractors. In November, however, voters approved a proposition that allowed some companies like ridesharing companies to continue classifying workers and independent contractors.

It is not clear that federal legislation on the issue would be able to pass in the Senate where Republicans have 50 seats.

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