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  • Writer's pictureVik F.

What the New Policy Changes Mean for Independent Contractors

Independent contracting and gig work have become essential lifelines for many Americans. Over one-third of us now earn income through some form of gig work. Whether it's driving for a rideshare service, delivering groceries, or freelancing online, these jobs offer flexibility and opportunities that traditional employment often doesn't. But recent changes from the Department of Labor (DOL) could disrupt this crucial aspect of our economy.

The DOL's new rule makes it much harder for workers to be classified as independent contractors. This rule is stricter than those under both the Trump and Obama administrations. The aim is to push employers to hire gig workers as traditional “W-2” employees, giving them the benefits and protections that come with full-time jobs.

But what does this mean for the gig workers themselves? How many will actually transition to full-time employment? More critically, how many will simply lose their gig opportunities?

Unfortunately, the DOL hasn't provided clear answers. They've assumed, without much evidence, that the new rule will lead to no job losses and no added costs. However, if we look at California's experience with a similar policy, we see a different story.

California's Assembly Bill 5 (AB5) is the country's strictest law for classifying workers as employees rather than independent contractors. After AB5 was implemented, many people in gig jobs saw their work opportunities vanish. Self-employment in affected fields dropped significantly, with about 1 in 10 losing their gig jobs. There wasn't a corresponding increase in traditional W-2 jobs to make up for this loss. In many cases, the law simply made much legitimate contracting work illegal, leading to job losses without new employment opportunities.

This is troubling news for the majority of independent contractors who love their work arrangements. According to recent surveys, 79% of gig workers prefer the flexibility of their current jobs and don't want to switch to full-time employment. Many also want access to flexible or portable benefits that aren't tied to a specific job but can move with them from gig to gig.

These preferences suggest that there's a better way forward. Instead of forcing gig workers into traditional employment roles, the government could support them by offering access to flexible benefits. This approach would provide the flexibility workers cherish while also giving them the security of benefits, creating a win-win situation for everyone involved.

As lawmakers across the country consider following the DOL's lead, it's crucial to listen to the voices of gig workers themselves. Are these workers excited about the new policy changes, or are they worried about losing the flexibility and opportunities that gig work offers? We want to hear from you.

Do you like or dislike the policy changes? Do you think they will help or hurt your ability to earn a living?

  • I think the new policy is great for Gig Workers.

  • I'm excited for other policy changes.

  • I don't agree with the policy change for Gig Workers.

  • I don't want other policy changes in the future

You can vote for more than one answer.



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