The new U.S. Department of Labor regulations would replace a Trump-era rule that lowered the bar for classifying employees as contractors, workers who are not covered by federal minimum wage laws and are not entitled to benefits including health insurance and paid sick days.
The Labor Department argued that the Trump administration rule did not comport with the 1938 Fair Labor Standards Act and decades of case law applying it. Wedbush analyst Dan Ives said the proposal would constitute a major change for workers and employers from previous years. “Today’s proposed rule takes a measured approach, essentially returning us to the Obama era, during which our industry grew exponentially” CR Wooters, head of federal affairs at Uber, said in a statement.
Both companies had applauded the Trump administration rule, arguing that the Depression-era Fair Labor Standards Act law was outdated and did not provide the flexibility demanded by the digital era.
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