Biden Rule Would Turn More Gig Workers Into Full Employees

The White House is reportedly preparing new guidelines that provide additional protections to gig workers.

The updated Department of Labor rule could be handed down as soon as this week, and would make it harder for companies to classify workers as independent contractors, Reuters reported Monday (Jan. 8), citing an administration official.

The rule said that employees who are “economically dependent” on a company are entitled to additional benefits and legal protections.

Reuters noted that many industries will be affected by the rule, but perhaps none more so than companies like Uber and DoorDash, which depend heavily on contract workers. The report also said the rule is likely to face a legal challenge.

The news comes weeks after European Union (EU) member states rejected a provisional deal that would have reclassified millions of gig workers as employees.

Officials from Spain, the current holder of the EU’s presidency, sent the issue back for further negotiations with the European Parliament after determining the deal did not have sufficient support.

The provisional agreement would have required ride-hailing and food-delivery platforms such as Uber and Deliveroo to grant full employment status to roughly 5.5 million workers.

“However, concerns about the potential economic impact of the deal led EU member states to reject it, estimating it could cost the gig economy industry billions of euros annually,” PYMNTS wrote. Spain said it remained committed to “defending an ambitious directive that improves the situation of digital platform workers.”

Two days earlier, Uber and other ride-hailing companies agreed to give their French drivers a raise, with those workers now eligible for 9 euros per trip — up from 7.65 euros — along with a guaranteed income of at least 30 euros per hour and 1 euro per kilometer.

Meanwhile, NCR Voyix President of Digital Banking Doug Brown examined gig work recently as he looked at payment trends for 2024.

“With an increasing number of Generation Z individuals expressing a preference for self-employment, and economic hardships pushing people to seek additional income sources, gig work is experiencing a significant rise,” Brown wrote.

“However, this often entails various financial intricacies that may go unnoticed until an issue arises. For financial institutions, there is a great opportunity to better serve this unique segment by providing gig workers with the tools and education to better navigate some of these potential pitfalls and maximize their profits.”