A vast array of U.S. businesses escalated their legal battle against the Biden administration’s new worker protections Tuesday, arguing that the federal rules — meant to help provide better pay — are costly, improper and could decimate the gig economy.
The legal challenge could prevent more ride-sharing drivers, home-health aides, janitors and truckers from being treated as employees, rather than independent contractors, which would ultimately deny these workers access to a minimum wage and overtime pay.
The dispute concerns one of the more significant regulatory actions taken by the Labor Department since President Biden took office pledging to reinvigorate workers’ rights. Finalized in January, the government’s new rules spell out the process by which companies must determine how a worker is classified, and as a result, the benefits they should receive.
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The intense opposition has greatly troubled workers’ advocates, many of whom have called on Biden to take more aggressive action to ensure companies do not mischaracterize workers as independent contractors simply to save money — denying them better pay and other rights in the process.
“Congress intended this law to be applied very broadly,” said Laura Padin, director of work structures at the National Employment Law Project, an advocacy group that found in a 2020 analysis that between 10 and 30 percent of employers misclassify their employees as independent contractors to save money.
“For decades now, we have seen employers misclassify people as independent contractors as a way to avoid complying with minimum wage and overtime pay, and to pass more of the risks and costs to workers,” she said.
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