Rideshare Companies, Retailers Brace for Biden Admin’s Crackdown on Independent Contractors

By Nandita Bose

WASHINGTON (Reuters)—After weeks of lobbying the White House on how gig workers should be treated, the rideshare, delivery, and retail industries are bracing for a new rule that is likely to make it easier to classify them as employees, multiple sources say. A proposed rule from the Department of Labor, aimed at defining whether gig workers for companies including Uber, Lyft, DoorDash, and retailers such as Amazon.com Inc are misidentified as independent contractors, is under review at the White House’s Office of Information and Regulatory Affairs (OIRA) and is expected to be released in coming weeks.

While the details of the new rule are not known, the department could model it on legal guidance that says people economically dependent on a company are employees or go even further to expand the pool of workers who should receive benefits, legal experts said.

Groups representing employers, including the U.S. Chamber of Commerce, The National Association of Home Builders, The National Retail Federation, and the Associated Builders and Contractors have met with officials at the White House’s Office of Management and Budget, according to White House records and sources.

Some of the groups have been trying, and failing, to convince the White House that any broad rule would hurt workers who want to remain independent and have flexibility, people familiar with the discussion said. More than one-third of U.S. workers, or nearly 60 million people, performed some sort of freelance work in the past 12 months, a December 2021 survey by freelancing marketplace Upwork showed.

Broadly defining independent contractors as employees would also force companies to pay benefits, such as overtime pay and health benefits, that would hurt their bottom line. Employers can save about 30 percent by skipping payroll taxes and unemployment and benefit costs, workers’ groups estimate.

The meetings at the White House were one-sided, with officials at OIRA letting groups speak and not participating or asking follow-up questions, several employer sources said. They are interpreting that as a sign the Biden administration’s mind is made up.

POLITICAL

“It’s all very political. The administration has been clear about