Wake up, babe! That freelancer gig of yours might actually be a full time position. 💼
The Biden administration just finalized a new rule that impacts the gig economy. 📝 Under the legislation there are stricter standards around when a contractor could be considered an employee. 🧑💼
Is this good for Paychecks?
Here’s Five Fast Facts on the new gig worker rule:
- 🤔 Consider This - The Department of Labor tightened up their guidelines for who's considered a contractor. Back in 2021, employers only had to focus on two out of six criteria to determine if a worker is a contractor. Now, all six criteria need to be considered. Here's the list: whether the employee can make a profit based on their managerial skills, whether the employee invested in the company, the permanence of the relationship, how much control the company has over the employee’s operations, the skill level of the employee, and "additional factors."
- 🆕 Out with the Old - Companies often opt to hire contractors over full time employees to save on benefits and legal costs. Under the Trump administration, workers who owned their own business or worked for competing companies could be treated as contractors. This new rule will make it harder for companies to treat workers as independent contractors.
- 💁🏼♀️ Two Sides of the Coin - Those in favor of the rule say misclassifying employees deprives workers of basic rights and protections and the new rule makes sure they get what they deserve. But those against the ruling argue that it prioritizes unions over Americans who earn a living outside of them. The rule is also expected to increase costs for the trucking and retail industries. <ouch>
- ⚖️ Altered States - Different states may have their own interpretations on who's considered a contractor over an employee. The rules won’t override California’s policies on contractors, for example, which are significantly more restrictive than those of other states.
- 🧑🏻💻 Gaga for Gig Workers - The gig economy grew massively over the last several years. Pre-pandemic statistics show 57.2 million American workers were gig workers. In 2023, there were an estimated 73.3 million freelancers in the United States.
🔥Bottom line: These new rules aren't likely to impact rideshare drivers or food delivery gig workers, but they could flip a switch on a number of freelancing gigs. If your contracting job feels more like a 9 to 5, it just might be! Did COVID kill variety in our grocery stores? Head here to find out!
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