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USA : Companies relying on gig economy workers file lawsuit to enforce rule making it easier to classify their workers as independent contractors

" Employers Use Courts to ‘Raise the Cost’ on DOL Rule Reversal", 5 Apr 2021

The business lobby is using a Texas legal challenge to frustrate the Biden administration’s agenda for the gig economy and throw up burdensome roadblocks for the U.S. Labor Department as it moves to nix a Trump-era rule on independent contractors.

The case filed in late March by the Coalition for Workforce Innovation—with members including Uber Technologies Inc., Lyft, and Postmates—claims the administration violated the Administrative Procedure Act with a decision to put off the rule, which makes it easier for businesses to classify workers as independent contractors...

The issue has wide ramifications for gig-economy workers and businesses, as the lawsuit could stall DOL’s plans to eventually re-interpret the law to determine many of these independently contracted workers actually employees entitled to wage protections...

The question remains how and when DOL would replace the withdrawn rule. The administration supports policies that would make it difficult for companies—including firms like Uber and Instacart—to continue relying on independently contracted workers who aren’t eligible for workplace protections such as minimum wages and overtime.

The White House can work with DOL to further this strategy while the Trump rule is pending in many ways, including by relying on new enforcement directives to target gig companies for wrongly classifying workers as independent contractors.

But to the industry associations on a mission to preserve the reduced costs of independent contracting, suing Biden on technical grounds sends a message that the new president can’t easily eliminate what was arguably the most significant step DOL took to help businesses under Trump...