Labor Board Reversing Trump-Era Ruling, Broader Definition of Employee

Labor Board Reversing Trump-Era Ruling, Broader Definition of Employee

Labor regulators issued a ruling Tuesday that makes workers more likely to be considered employees rather than contractors under federal law.

overturned a ruling issued when the board was under Republican control, Decision Effectively increases the number of employees – such as drivers, construction workers or janitors – who have a federally protected right to form a union or take other collective action, such as protesting unsafe working conditions.

The ruling ensures that “workers who seek to organize or exercise their rights under the National Labor Relations Act are not unreasonably excluded from its protection,” Lauren McFerran, the Democratic chair of the labor board, said in a statement. Said, who voted with 3 to 1. Party line to broaden the standard.

Determining whether a worker is an employee or a contractor has long depended on a number of variables, including the potential employer’s control over the work and the provision of tools and equipment.

In 2019, when the board was appointed by President Donald J. Trump’s appointees, it elevated one idea—the potential for workers to make more money based on their business savvy, often described as “entrepreneurial opportunity”—above others. . It concluded that such opportunities should be a significant tiebreaker when some factors pointed to contractor status and others indicated employment.

In its ruling in 2019, the board said a decision during the Obama administration had unfairly subordinated the question to money-making opportunities.

That 2019 ruling appeared to be a victory for gig companies like Uber and Lyft, whose supporters have argued that ride-share drivers should be treated as contractors partly because they have potential profit opportunities — say , by determining which neighborhoods to work in .

The latest decision returned the board to the standard it set in the Obama era, clearly rejecting the elevation of entrepreneurial opportunity above other factors.

The turnout was criticized on Tuesday by businesses relying too heavily on contractors. in a statementEvan Armstrong, president of the Coalition for Workforce Innovation, which represents companies like Uber and Lyft as well as industry trade groups, said the ruling “undermines clarity and threatens the flexible independent model that provides workers, benefits consumers, entrepreneurs, businesses and more.” overall economy. ,

However, some labor experts say it’s unclear whether gig companies like Uber and Lyft, which set prices to be paid by passengers, make enough for drivers to qualify as contractors even under the old standard. Provides entrepreneurial opportunities.

In his dissent, the board’s lone Republican member, Marvin E. Kaplan, made a version of this argument, concluding that the workers in the case before the board—the wig, hair and makeup stylists who work with the Atlanta Opera—”k There are very few opportunities for economic profit or, conversely, the risk of loss.

As a result, he agreed with the majority of the board that stylists should be considered employees who have the right to unionize.

But Mr. Kaplan wrote that the lack of entrepreneurial opportunities meant that stylists should have been considered employees even under the Trump-era standard, and there was no need to change that.

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