A not insignificant status issue: the US government presented a new text on Tuesday that would expand the criteria for evaluating the status of a worker and could lead to the reclassification of the self-employed as wage earners, with a significant impact on the new gig economy .
The new regulatory framework, which will be subject to consultation until the end of November, returns to the nomenclature defined under the Trump administration, which was considered more restrictive and would be replaced by this new text. The formula proposed by the government of US President Joe Biden is based on a multi-criteria approach, which includes in particular the duration of the relationship with the company and the degree of control that the company exercises over the worker.
Reclassification as an employed person allows, in particular, a worker to benefit from minimum wage and working time guarantees.
The text would not have binding value, unlike a law, and would serve as a reference for companies but also for the courts in case of litigation.
“Hidden work” in France
Self-employment status has been widely used by new service economy platforms and operators, from meal deliveries to passenger car (VTC) drivers, but this classification is increasingly being challenged.
In Europe, court rulings have sanctioned it, as in France, where several companies have been convicted of “hidden work.”
In California, the birthplace of the “gig economy,” the on-demand service economy, most often with tech companies acting as middlemen, a law passed in 2019 with effect from early 2020 has made it much easier to classify a worker. as an employee.
In 2020, a text supported by the main VTC platforms such as Uber or Lyft and adopted by referendum exempted drivers from the 2019 California law.
Dan Ives, an analyst at Wedbush Securities, said Tuesday’s Labor Department proposal “is a direct hit to the ‘gig economy’ and a source of near-term concern for Ubers and Lyfts.
On the New York Stock Exchange, the prices of the giants of this new service economy fell after the presentation of the text. Uber lost 10.42% in a single session, Lyft lost 12.02%, and meal delivery platform DoorDash lost 5.99%.
In a statement, Lyft said the government’s proposed new nomenclature “does not (reclassify) Lyft drivers as employees” and “would not (force) (the platform) to change its business model.”
The spirit of this new framework is close, the group stressed, to the one used by the Barack Obama administration, “which had not involved a reclassification of drivers.”
“The changes proposed by the Ministry of Labor will significantly increase the costs of companies, all sectors combined, and will accelerate inflation, which is already rampant”, reacted for his part David French, of the Retail Federation (NRF), in a Press release. .
Source: BFM TV
