Labor Secretary Walsh Addresses Gig Economy Worker Classification

U.S. Labor Secretary Marty Walsh recently addressed the contentious issue of the gig economy, stating that a significant number of workers currently categorized as independent contractors should, in fact, be classified as employees.

Department of Labor Reviewing Gig Economy Practices

During a discussion with Reuters, Walsh indicated the Department of Labor is actively examining practices within the gig economy. This review suggests potential worker reclassification as a key objective for the Biden administration.

Walsh articulated, “In numerous instances, gig workers ought to be categorized as employees.” He further emphasized the need for consistent treatment, noting that some workers are treated with respect while others are not.

Ensuring Equitable Benefits for Gig Workers

The labor department intends to engage with companies utilizing gig workers. The goal is to ensure these workers receive comparable benefits to those typically provided to traditional employees across the United States.

Walsh acknowledged the profitability of these companies, stating, “These companies are generating profits and revenue… but we also want to ensure that success extends to the worker.”

Market Reaction to Walsh’s Statements

Although no immediate federal action has been taken, Walsh’s comments significantly impacted tech companies reliant on non-employee labor. Shares of Uber, Lyft, and Doordash experienced declines following the announcement.

Pandemic Highlights Vulnerabilities of Gig Workers

Walsh also highlighted concerns related to the pandemic, specifically the lack of unemployment insurance and healthcare access for many gig workers.

While federal legislation has temporarily provided some benefits during the pandemic, these workers generally lack a comprehensive safety net.

Biden Administration’s Commitment to Worker Protections

Reforming labor laws has been a consistent priority for President Biden. He has repeatedly expressed support for strengthening worker protections and bolstering organized labor.

The Biden transition website previously identified the misclassification of employees as independent contractors as a widespread “epidemic.”

Support for Unions and the PRO Act

President Biden reiterated his support for labor unions during his address to Congress. He championed the Protecting the Right to Organize (PRO) Act, which aims to safeguard workers seeking to form or join unions.

The PRO Act would also broaden federal protections for whistleblowers.

“The middle class built this country,” Biden stated, “And unions build the middle class.”