Shares in Uber Technologies Inc., Lyft Inc. and other “gig work” companies fell sharply Thursday after US Labor Secretary Marty Walsh said gig workers should be classified as salaried employees.
“We’re looking at this, but in many cases gig workers should be classified as employees,” Walsh said in an interview with Reuters. “These companies make profits and revenues, and I’m not going to disapprove of anyone for that, because that’s what America is about … but we also want to make sure that success comes from the worker.”
These appear to be Walsh’s first public comments on the classification of gig workers – an increasingly important topic that has far-reaching implications for the future of work and some of the country’s most iconic companies.
“Uber believes that we should move forward with policies to improve independent labor, not eliminate it entirely,” Uber said in a statement. “But more important than what we think is what the drivers think: one survey after another shows that the vast majority of app-based employees want to remain independent because they can work with it when, where and how they can wanting to work with a flexibility without a traditional job can fit together. We have made proposals that will bring new benefits and protections to independent work, and we are ready to work with the administration, state lawmakers, and the people who work on our platform to make this a reality. “
“Dashers overwhelmingly told us they value the flexibility to earn when and how they choose,” said Elizabeth Jarvis-Shean, DoorDash vice president of communications and policy, in a statement. “That is why they only work an average of four hours a week, and that is precisely why we are committed to protecting their independence while at the same time offering more security and advantages. We look forward to continuing to work with the Biden administration and lawmakers across the political spectrum to develop modern policies that preserve the flexibility of workers and create a new portable, proportional and flexible performance framework. “
Walsh, a former union leader, is expected to give more teeth to U.S. labor laws under President Joe Biden’s administration. Biden himself said during his presidential campaign that he would “put an end to employers who deliberately misclassify their employees as independent contractors”.
The classification of gig workers became even more of a focus over the past year as the coronavirus pandemic wiped out demand for hail for months. Gig companies do not pay into state unemployment insurance systems, and drivers could only receive unemployment benefits under the federal pandemic unemployment assistance program.
Walsh, who said his department would talk to gig companies about workers’ pay and benefits, told Reuters: “If the federal government hadn’t covered gig economy workers, these workers would not only have lost their jobs, they would have lost their jobs neither did I have unemployment benefits to keep her family moving. We would have a much more difficult situation across the country. “