EPI welcomes the U.S. Department of Labor’s final rule issued today that will combat employer misclassification of workers as independent contractors and ensure that more workers can enjoy the rights and protections they are already legally entitled to.
Employer misclassification of workers as independent contractors robs workers of labor rights and threatens their economic security. Many workers are harmed by employer misclassification—particularly those in the lowest-wage and most difficult jobs, such as nail salon workers, truck drivers, and construction workers. Allowing employers to exploit loopholes in labor law puts these workers at greater risk. A previous EPI analysis found that in 11 commonly misclassified occupations, workers misclassified as independent contractors lose out on thousands of dollars in earnings and benefits per year, compared with workers doing the same job with employee status.
Since this rule was proposed, opponents of this rule have waged an all-out misinformation war, claiming that independent entrepreneurs and business owners will now be forced into employee status against their will. The reality is that if the Trump administration’s rule was allowed to stand, workers with far less power to actually set the terms and conditions of their employment—not bonafide contractors—would have continued to lose out on basic worker protections, earnings, and benefits to which they should be entitled.
