The US Department of Labor on Thursday proposed to withdraw a Trump-era rule making it easier for companies to classify employees as independent contractors. The rule was promulgated shortly before President Joe Biden’s inauguration but has not gone into effect yet. It was widely expected to be eliminated by the Biden administration, which expressed an intent to revive Obama-era classifications of independent contractors.
Under the Trump-era rule, a simplified economic reality test would be used to determine if an employee is an independent contractor, primarily depending on a worker’s autonomy and ability to profit. Such a rule would be a massive benefit to gig economy companies such as Uber and Lyft, allowing them to avoid paying minimum wage and overtime pay.