On Tuesday, the U.S. Department of Labor released a final rule to help employers and workers understand when a worker qualifies as an employee versus an independent contractor under the Fair Labor Standards Act.
The DOL rule provides guidance seeking to combat employee misclassification, a problem that it said impacts workers’ rights to minimum wage and overtime pay, facilitates wage theft, allows employers to undercut their law-abiding competition, and hurts the economy.
“Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections,” said Acting Secretary of Labor Julie Su in a statement. “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.”
In response to the statement, DoorDash highlighted its compliance with the law in the following statement:
“We are confident that Dashers are properly classified as independent contractors under the FLSA, and we do not anticipate this rule causing changes to our business. We will continue to engage with the Department of Labor, Congress, and other stakeholders to find solutions that ensure Dashers maintain their flexibility while gaining access to new benefits and protections.”
The online food delivery platform also emphasized that most of its employees prefer to remain as independent contractors, as most gig workers for the service work less than 10 hours per week.
Uber also noted in a statement that the ruling does not alter its service.
“This rule does not materially change the law under which we operate and will not impact the classification of the over one million Americans who turn to Uber to earn money flexibly. Drivers across the country have made it overwhelmingly clear…that they do not want to lose the unique independence they enjoy.”
The rule will take effect on March 11, 2024.
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