The resignation of Secretary of Labor Marty Walsh this week has prompted the lobbying group that represents Uber Technologies Inc., DoorDash Inc., Lyft Inc. and other gig companies to call for putting off finalizing a proposed Labor Department rule on worker classification.
In October, the department proposed a rule that would change who can be considered an independent contractor or an employee — returning to a previous test to determine whether workers are actually independent. At the time, Walsh mentioned “many cases” of worker misclassification. The new rule was expected to take effect early this year.
Though gig companies like Uber UBER, -4.24%, Lyft LYFT, +1.65% and DoorDash DASH, -7.64% last year reacted to the proposed rule by saying it would not change the classification of their drivers and couriers as independent contractors, their lobbying group Flex is now asking for a delay of the rule’s finalization anyway.
“The Department should not finalize its worker classification proposal without a permanent Secretary of Labor who has been nominated by the President and confirmed by the United States Senate,” said Kristin Sharp, chief executive of Flex, in a statement Friday.
The Labor Department did not immediately return a request for comment Friday.
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The business model of such app-based platforms relies on treating ride-hailing drivers and delivery workers as independent contractors. Across the nation and around the world, these companies are constantly fighting to keep their workers from being classified as employees. Instead they are advocating for an in-between approach that gives the workers some benefits but not full employee status with benefits such as workers’ compensation, sick pay and more.
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Walsh, a former mayor of Boston and a former union official, on Thursday was named the executive director of the NHL Players’ Association and will begin his new role in mid-March. Deputy Secretary Julie Su will become acting secretary under the Labor Department’s rules.