A group representing Uber Technologies Inc., Lyft Inc. and other app-based services is raising concern about President Joe Biden’s nominee to lead the Labor Department over her stance on worker-classification rules.
In a letter to Biden dated Monday that was shared with Bloomberg News, the Flex Association asked that the nominee, Julie Su, explain how she would implement a proposed rule that could make it easier for workers to be considered employees rather than independent contractors “in a manner that protects independent work.”
It also requested that the Labor Department “delay action” on the proposal until the Senate confirms a nominee for secretary. Gig companies such as Uber, Lyft, DoorDash Inc. and Instacart Inc. rely heavily on contractors to staff their fleets and have closely scrutinized the rule.
The letter illustrates the battle lines being drawn around Su’s nomination to replace Marty Walsh as labor secretary. Business groups and Republicans have criticized her support for measures affecting the gig economy, while she has earned plaudits from Democrats and labor groups for her stance on workers rights.
The White House sent Su’s nomination to the Senate last week, allowing the confirmation process to begin.
Flex Chief Executive Officer Kristin Sharp wrote to Biden that the group is concerned that Su “does not fully appreciate the potential impact” of the measure and “has a record indicating an oppositional approach to policymaking that carries real implications as she seeks to be elevated to serve as the Department’s primary policymaker.”
A White House official defended Su, saying she would ensure workers receive all rights and protections available to them under federal law if confirmed as labor secretary. Proper classification of workers would benefit the economy and guarantee they are eligible for unemployment insurance, overtime and minimum wage, the official added.
Su, who previously served as deputy labor secretary, led California’s labor department before joining the Biden administration. She supported a law making it more difficult for companies to classify workers as contractors, which allows businesses to save millions of dollars but deprives workers of protections like minimum wage and benefits.
Sharp said the California law, which is being challenged in federal court, “wreaked havoc across multiple industries.” While stopping short of opposing Su’s nomination, Sharp demanded that Su explain her views on the policy during Senate confirmation “so that stakeholders can properly evaluate their position on her nomination.”
The Biden administration issued a proposal on independent-contractor status last October that would undo a Trump-era standard that made it easier for companies to hire people as contractors, which critics said left workers vulnerable to misclassification. The proposed rule isn’t final yet.
The proposal imposes a multifactor test that considers all elements of the working relationship equally in determining whether a worker is an independent contractor or an employee. The Trump-era test gave more weight to a person’s degree of control over their work and the opportunity for profit and loss.
Business groups have criticized the proposal, saying it would increase costs for companies and make the worker-classification process more confusing.
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