The Labor Department on Wednesday announced the withdrawal of the Trump-era independent contractor rule that allowed businesses to classify workers as independent contractors as opposed to employees.
The administration’s move, effective Thursday, allows for workers considered “gig workers” to have minimum wage and overtime compensation protections under the Fair Labor Standards Act (FLSA). Employee classification has major implications for companies like Uber, Lyft and DoorDash, which depend on gig workers.
“By withdrawing the Independent Contractor Rule, we will help preserve essential worker rights and stop the erosion of worker protections that would have occurred had the rule gone into effect,” Labor Secretary Marty Walsh said in a statement. “Legitimate business owners play an important role in our economy but, too often, workers lose important wage and related protections when employers misclassify them as independent contractors.”