The Biden administration published a new proposal Tuesday regarding how workers should be classified, saying that thousands of people have been incorrectly labeled as contractors rather than employees, potentially curtailing access to benefits and protections they rightfully deserve.
The new U.S. Department of Labor regulations would replace a Trump-era rule that lowered the bar for classifying employees as contractors, workers who are not covered by federal minimum wage laws and are not entitled to benefits including health insurance and paid sick days.
The reaction in markets for major gig companies was immediate. Shares of of the ride-hailing companies Lyft and Uber tumbled about 8%, although both companies dismissed the significance of the new proposal and its potential to affect their business.
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