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By Nandita Bose
WASHINGTON, Oct 10 (Reuters) – A proposed Labor Department rule defining whether workers at ride-sharing, retail and delivery companies are misidentified as independent contractors is expected to be released as early as Tuesday, two sources said aware of the case.
Details of the new rule have not been made public. But the department should take a cue from legal guidelines that those economically dependent on a business are employees, or go further to expand the pool of workers who should receive benefits, legal experts said.
The Labor Department has scheduled a press conference for 9:30 a.m. ET Tuesday with labor attorney Seema Nanda and Deputy Senior Wage and Hour Administrator Jessica Looman, but did not provide details on what they will discuss. .
The Labor Department and the White House declined to comment.
The White House Office of Information and Regulatory Affairs (OIRA) completed a review of the rule on Sept. 29, according to White House records.
Tim Taylor, a litigator and partner at Holland & Knight, who had served as assistant counsel with the Labor Department, said the rules are usually approved in three weeks to a month, but the independent contractor rule was with the OIRA from the White House for about three months. .
He said the lengthy review period at the White House suggests the Labor Department’s proposed rule is either long and complex or that the White House wanted something different than what the department was proposing.
“And usually when that happens, it’s because the White House wants something more aggressive,” he said.
Reuters recently reported that groups representing employers had tried, unsuccessfully, to convince a pro-worker White House that any blanket rules would hurt workers who want to remain independent and have flexibility.
More than a third of American workers, or nearly 60 million people, have done some kind of self-employment in the past 12 months, according to a December 2021 survey by freelance marketplace Upwork.
Broadly defining independent contractors as employees would force companies to pay benefits, such as overtime pay and health, that hurt their bottom line. Employers can save around 30% by avoiding payroll taxes and unemployment and benefit costs, workers’ groups estimate.
In separate meetings with the White House to discuss the rule, several labor groups have argued that a growing number of companies, including in the healthcare sector, are misclassifying hundreds of thousands of workers. These workers often find themselves without social safety nets, accident coverage or paid sick leave, and are squeezed by high gas prices, they said.
This is President Joe Biden’s second attempt to reset the rules on how employees can be defined. A Texas federal judge ruled in March that the Biden administration, which removed a Trump-era rule that favored business groups on the issue, failed to follow proper procedure.
The proposed rule will be open for public comment before the Labor Department releases a final rule, which companies should quickly challenge in court.
(Reporting by Nandita Bose in Washington, additional reporting by Dan Weissner and David Shepardson, editing by Heather Timmons, Colleen Jenkins and Gerry Doyle)