In usual destructive fashion, the Biden administration has issued a new contractor rule that channels one implemented in California (AB 5). That rule upended thousands of jobs and created chaos until several parts of it were exempted by referendum in September of 2020. Biden doesn’t care about details; he apparently wants American businesses destroyed and independent workers deleted. The administration announced that independent contractors now must be listed as regular employees of a business. The cost will be felt by every American.
The contractor rule
“On January 9, 2024, the U.S. Department of Labor announced a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), that was published on January 7, 2021 and replaces it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent.” Dept of Labor
Despite all the glowing promises of better wages and more legal protections, the new contractor rule does exactly what the California law did: demand that anyone who owns their own business and works freelance for others must be listed as a regular employee. How many thousands of jobs will be ultimately deleted from this action is a problem this administration never thinks about.
“Gig” workers, or independent contractors own their own businesses. In the case of truckers, for example, being able to get jobs from various companies makes the supply chain workable. Removing that ability caused immediate problems for the trucking industry in California. But this new rule could expand problems across the board:
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Individuals who drive for Uber or Lyft will also be affected by this rule. Independent journalists who often write for main outlets, freelance caterers who may serve food for a restaurant, delivery drivers who work across the board for several businesses… there are a number of issues that arise from the administration attempting to give everyone the same deal. And all of it will cost money.
“The misclassification of employees as independent contractors may deny workers minimum wage, overtime pay, and other protections,” the DOL announcement reads. “This final rule will reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves.”
Workers who are considered “economically dependent” on their employer will no longer be classified as contractors under the rule, being considered employees instead, according to the DOL. The DOL argues that workers commonly referred to as contractors, self-employed or freelancers are often not actually in “business for themselves” and therefore should be considered employees.
The DOL first issued a proposal to remove and replace the 2021 rule on Oct. 13, 2022, arguing that independent contractors have been “denied critical benefits and labor standards protections.” Will Kessler at the Daily Caller
At issue here is the freedom to be independent. It is unclear how this will affect the thousands of people who are listed as “self-employed” and work on a contractual basis (and how will that affect their taxes?). Forcing the business to list them as a regular employee when they are not will likely cause serious backlash, as it did in California. It will seriously upend the jobs market.
Of course, the Biden administration plays fast and loose with the jobs figures as well. The DCNF reported on January 8 that the government had to remove thousands of jobs from its report because they actually did not exist.
“The sum of the initial estimate from each of the government’s monthly job growth reports in 2023 totaled 3,140,000 new jobs, with later reports revising down the number of jobs added by a collective 443,000, according to the BLS. The BLS also announced in August a revision in total employment for March, subtracting another 306,000 jobs.” Daily Caller
Thanks, Biden. 2024 could prove to be even more of a total mess.
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Related:
- Biden Attempts to Add Acting Secretary of Labor Julie Su to Line of Succession to President
- Think Things Are Expensive Now? Imagine The Future Without Truckers
- California Passes New Law Establishing Fast-Food Minimum Wage Of $20/Hour; McDonald’s To Spend $250,000 More Per Restaurant Per Year
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