United States Secretary of Labor Marty Walsh said Reuters On Thursday, those gig workers should be treated as employees. For President Joe Biden's top labor officer to say so is a welcome development for this class of workers – including drivers for Uber, Lyft and DoorDash – which has long strived for this distinction but has so far been unsuccessful.
"We're looking at it, but in a lot of cases gig workers should be classified as workers … in some cases they're treated with respect and in some cases they aren't and I think it should be consistent across the board," Walsh told Reuters.
"These companies are making a profit and income and I won't grudge anyone for that because that's what America is all about … but we also want to make sure the success trickles down to the employee," he said. .
A national decision on who is and is not an employee can have wide-ranging implications for the U.S. workforce, of which about a quarter to a third, depending on the estimate, can be considered a contract or handyman. Being considered an employee guarantees employees a number of benefits, such as guaranteed minimum wages and overtime, that indentured servants do not have.
Gig workers have long complained about unfair working conditions, from earning less than the minimum wage to a lack of healthcare and direct exploitation. After a long struggle from labor activists, New York City passed the first minimum wage legislation for Uber and Lyft drivers in 2018. During the pandemic, workers in the gig economy were particularly hard hit.
The labor struggle to turn gig economy workers into employees took a massive blow last fall in California, where many of the gig economy companies are based, with the passage of Proposition 22. The Voting Initiative, written by Uber, Lyft and DoorDash, under others, effectively proclaimed independent contractors of drivers who drive, but provided them with minor protections. Prop 22 overturned previous state law, Assembly Bill 5, which had instructed gig companies to prove workers' jobs were outside of their core duties, to consider them contractors. Famed service Uber said its drivers were not part of its "usual course" because it was a technical platform for "digital marketplaces" and not primarily an employer of drivers.
Gig companies have spent $ 200 million lobbying for Prop 22's passage, an amount that makes sense when you consider that analysts estimate that creating driver personnel would cost Uber one. an additional $ 500 million each year and Lyft $ 200 million. Employees can be employers according to estimates from the Economic Policy Institute.
Uber, Lyft and DoorDash Stocks decreased significantly after Reuters Sec. Walsh & # 39; s comments.
The labor secretary helps establish guidelines for how employees are treated. It's unclear whether the Department of Labor will introduce new policies on how workers should be classified, but the secretary's statement at the very least indicates that Biden's government is reflecting on the matter.