Labor Department Gets on its Knees for Gig and Other Companies

Citizen Wealth Financial Justice

Greenville       If the current administration remains in office in 2021, don’t be surprised if they float a proposal to move the Labor Department over to the Commerce Department as one of its smaller divisions.  These days with every new proposed rule they seem to see their mission as protecting business, not labor; bosses, not workers.

The latest example is a proposed “interpretative” rule, that would not have the force of law, like a regulation would, but would sow confusion and kowtow to certain employers and their lobbyists who have made diluting the tests to determine employment status a top priority.  This proposal is a pretzel twist to serve gig masters like Uber and Lyft, the ride-hailing outfits, as well as other companies employing cleaners, construction labor, home health workers, and maybe tipped workers.  Simply put, companies would rather not be bothered paying minimum wages, social security, and unemployment for their workforce.

Here’s how this mischief plays out.  There are a number of “tests” or criteria that employers, workers, and the unions, that represent them, and the courts, that try to sort it all out, use to determine whether a worker is an employee of a company or an independent contractor.  These elements include the degree of discretion a worker has, the degree of control the employer exercises over the work, whether a worker sets the wage and hours of their work, and things of this nature.  Weighing all these factors equally would establish whether a worker was an employee or a subcontractor.

The DOL wants to allow the employer and the giggers to put their whole fist on the scale.  They want to elevate two factors over all others.  First, the question of employer control of the work, and, secondly, some strange, new measure that would evaluate whether the worker has the opportunity to profit based on “initiative,” as opposed to simply a determined wage.

You might wonder, as I do, how in the world that could be easily measured?  Certainly, it is easy to see how this “interpretation” of employment status was written in all likelihood in the offices of the general counsels for Uber or Lyft.  They are losing a bloody fight now in California, so they are scarred and hardened veterans of this war.  The DOL tries to spin this new rule as a modernization of the changing pattern of work and development of gig work, because that is where the pressure came from, but it’s more than that.

A worker having “the opportunity to profit on initiative” also could be construed to cover almost all tipped employees!  Don’t think this is not an age-old argument for workers whose real money comes from gratuities, not the minimal tipped offset wage of a bit over $2 per hour. For forty years or more I’ve listened to workers in the service industry argue about whether something was a “job or a hustle,” with the employer furnishing the stage and setting, and the worker making their money in a performative role.

Nothing good will come of this DOL proposal.  It’s mayhem in the making!  When published, it will have a short 30-day window for public comment, much narrower than would be usual for such a major revision, but that’s because the DOL can see darkness at the end of the year.  These political appointees need to find new jobs working for the companies they have tried to serve with these proposals, so they want to get it done.

Best to nip this in the bud, rather than hope that the courts will do it later, since there are dark storm clouds on the horizon there in our future for sure.