US Labor Department rescinds Trump admin rule targeting gig workers

It's a big step toward recognizing gig workers as employees.

Gonzalo Fuentes / Reuters

In what's sure to be great news for Uber drivers and on-demand delivery workers, the US Department of Labor announced that it's rescinding the Trump administration's "independent contractor rule," which would have made it simpler for employers to classify gig workers as contractors, rather than employees. The move, which takes affect on May 6th, is meant to ensure that gig workers retain worker protections under the Fair Labor Standards Act. Those include guaranteeing minimum wage payment and time-and-a-half minimums for overtime, protections that don't exist if you're classified as an independent contractor.

“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,” US Secretary of Labor, 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. We remain committed to ensuring that employees are recognized clearly and correctly when they are, in fact, employees so that they receive the protections the Fair Labor Standards Act provides.”

Rescinding the Trump-era rule is just the first step, though. According to Reuters, Walsh says he plans to speak with on-demand companies about ensuring their workers have access to steady wages, as well as benefits like sick time and healthcare. For gig workers, it means they'll finally be treated like legitimate employees, rather than fairly disposable labor. Given just how hard Uber and Lyft fought for Prop 22 in California though, which classified their drivers as contractors, employers likely won't accept the government's new demands easily.