Long Island business and labor groups are taking different sides on proposed changes to the classification of employees and independent contractors, which could overturn the rules for gig workers.
Last month, the U.S. Department of Labor unveiled a new worker classification proposal that said thousands of people were misclassified as contractors rather than employees, potentially limiting access to benefits and protections they rightfully deserve . The department said that misclassifying workers as independent contractors denies those workers protection under federal labor standards, encourages wage theft, allows certain employers to gain an unfair advantage over companies and hurts the economy.
In a letter sent to Labor Secretary Marty Walsh this week, the Long Island Association, the Long Island African American Chamber of Commerce and the Long Island Hispanic Chamber of Commerce expressed their opposition to the plan. The business groups say the proposed changes will create confusion among small business owners about how workers are to be classified and that the revisions are “too broad” and could also lead to increased litigation and costs for small businesses.
“Companies and independent contractors enter into consulting agreements for many reasons, including flexibility and the need for a specialized service for a limited period of time,” the letter reads. “The spread of remote work has helped small businesses grow by making it easier for them to find and secure specialized services from independent contractors. While we support the protection of workers’ rights, we urge you to explore alternative ways to strengthen worker protections without changing the definition of an independent contractor.”
The proposed rule, which could take months to come into effect, would replace a scrapped Trump-era standard that had lowered the bar for classifying workers as contractors, including workers not covered by federal minimum wage laws and not eligible for benefits Have health insurance and paid sick leave.
Worker groups support the proposed rule changes. A joint statement by John Durso, President of the Long Island Federation of Labor, and Ryan Stanton, Executive Director of LIFL, called the DOL’s proposal fair and just.
“The intentional misclassification of workers as independent contractors weakens workers’ bargaining power, lowers labor standards for workers and unfairly disadvantages good employers,” the statement said. “This rule ensures that the United States Department of Labor has the tools to protect workers from the escalating problem of misclassification, enhance worker protections, restore benefits to workers who have been subjected to operational workarounds, and to do so helps make our economy fairer and just.”
The DOL will accept comments on the proposed rule changes through November 28th.
The Associated Press contributed to this report.