The Biden administration is blocking a Trump-era regulation that would have made it easier to classify gig workers and others as independent contractors, a policy that had been sought by companies such as food-delivery and ride-sharing services.
The Labor Department said Wednesday it is nullifying a rule it completed in early January that sought to make it more difficult for a gig worker, such as an Uber or DoorDash driver, to be counted as an employee under federal law. Having status as an employee, rather than a contractor, means those workers are covered by federal minimum-wage and overtime laws.
Employees are also better positioned than contractors to organize into labor unions. The Biden administration has made creating union jobs a priority.
The Labor Department acted this week to block the rule before it was implemented Friday, following a common practice of presidents of different parties undoing the prior president’s pending rules early in a new administration.
Nullifying the Trump rule maintains the decadeslong status quo, which has largely allowed app-based services to not count drivers and other providers as employees. But Wednesday’s action removes an extra layer of assurance gig-economy companies had sought as a way, they said, to modernize labor laws.