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The exclusive US Secretary of Labor supports the classification of gig workers as employees

© Reuters. FILE PHOTO: Secretary of Labor Marty Walsh speaks during a press conference at the White House in Washington

By Nandita Bose

WASHINGTON (Reuters) – Many gig workers in the United States should be classified as “salaried employees” who deserve work, President Biden’s Secretary of Labor said Thursday, suggesting a policy change likely to increase costs to businesses, which depend on contractors like Uber (NYSE 🙂 and Elevator (NASDAQ :).

Labor Secretary Marty Walsh, the son of Irish immigrants and a former union member, was expected to step up efforts by the Biden government to expand worker protection and make a profit for the country’s organized labor movement.

“We’re looking at this, but in many cases gig workers should be classified as employees … in some cases they are treated with respect and in some cases they are not, and I think it has to be consistent across the board,” said Walsh said Reuters in an interview, expressing his opinion on the matter for the first time.

“These companies make profits and revenues, and I’m not going to disapprove of anyone for that, because that’s what America is about. But we also want to make sure that success comes from the worker,” he said.

Uber’s shares fell as much as 8 percent, while Lyft fell as much as 12 percent. Doordash fell nearly 9 percent and Grubhub fell 3.3 percent.

Walsh’s work at the Department of Labor is expected to have a major impact on U.S. labor laws and regulations, including strict enforcement of health and safety regulations, overtime payments, and the proper administration of employee benefit plans.

According to the International Labor Organization, 55 million people in the US were gig workers – or 34% of the workforce – in 2017 and the total was projected to rise to 43% in 2020.

Walsh’s views on the matter could lead to new decisions by the department, which sets legal guidelines for employers’ dealings with employees. Prior to his appointment, the Department of Labor’s Payroll and Hourly Department suggested repealing a rule passed in January that would have made it easier to classify workers as independent contractors.

Walsh said the department will hold talks with companies employing gig workers in the coming months to ensure workers have access to uniform wages, sick leave, health care and “all the things the average worker in America accesses.” can “.

The department’s decision could have far-reaching implications for hail services like Uber Inc, Lyft, and food delivery apps like Grubhub Doordash and Postmates.

An Uber spokesman said the United States should move forward with policies to improve, not eliminate, independent labor. The company said an overwhelming majority of app-based employees want to stay independent because they have the flexibility to work when, where and how they want without a traditional job keeping up.

A Doordash spokeswoman said, “Dasher have overwhelmingly told us that they value the flexibility they can deserve when and how they choose. We are committed to protecting their independence while providing greater security and benefits. “

Gig employees are independent contractors who provide on-demand services, including driving, grocery delivery, and childcare. According to a survey by Edison Research, they’re a third more likely to be black or Latin American.

Walsh also spoke about the risks posed by gig companies failing to pay unemployment insurance for such workers – a scenario that played out during the pandemic and has the U.S. government bogged down.

“If the federal government hadn’t covered the gig economy workers, not only would these workers have lost their jobs, but they would not have received unemployment benefits to keep their families moving. We would have a much more difficult situation.” across the country, “he said.

Over the past decade, gig workers have increased in number, indicating broad economic and demographic changes and, according to some experts, raising concerns about long-term financial security for a growing proportion of the workforce.


Walsh said the Department of Labor’s health and safety division, the OSHA, also plans to hire 160 federal inspectors to strengthen controls and enforcement across the country.

“OSHA has been decimated in the past four years,” he said.

There are currently 760 federal inspectors, and the latest hiring plan represents a significant leap at a time when the department has been losing inspectors every year.

OSHA and the Department of Labor have come under heavy criticism for having barely oversight and negligible penalties in place at workplaces such as factories and warehouses across the country, despite coronavirus outbreaks.

Walsh is also part of a White House task force recently set up by President Biden to promote unions and labor organization across the country. He said the first task force meeting would be in a couple of weeks.

Walsh spoke at length about the work organized labor must do to re-introduce itself to America’s younger generation. He also said the recent push to unionize an Amazon.com Inc (NASDAQ :). The Alabama facility that the union did not win is no loss to the labor movement.

“The labor movement is like a political campaign. I think the younger generation in America seems to have a new interest in the labor movement,” he said, adding that the Amazon campaign is an opportunity for unions and working groups to discuss it what organized work is is all about.


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