Matt Rourke/AP Photo
A FedEx driver sorts packages in a truck in Philadelphia, October 27, 2021.
Notoriously, the federal minimum wage doesn’t amount to very much. It’s been stuck at a pathetically low $7.25 an hour for well over a decade, though many states have set their own minimum considerably higher. (In California this year, it’s at $15.50.)
Nonetheless, a proposed rule released today by the Department of Labor would effectively guarantee a raise for the thousands of Uber and Lyft drivers in California, who are mislabeled as independent contractors and thus not covered under state or federal minimum-wage legislation. According to a recent study, when the expenses they have to pay to buy, lease, and/or maintain their cars are subtracted from their income, their real hourly income comes out to be a less-than-princely $6.20.
Today’s proposed rule, accordingly, would raise that level by about a dollar, and more importantly, qualify those drivers for overtime pay and require their employers to pay into the funds for Social Security and unemployment insurance. Those changes would take place because the DOL’s new rule would establish more real-world standards for what constitutes employment—criteria such as determining the rate the drivers charge and what share they pay to the parent company, or, if they drive trucks for FedEx or other companies, whether those trucks can be used for other work or driver use—that sort of thing. It’s a “if it quacks like a duck, it’s a duck” rule. Which stands in sharp contrast to the rule, still on the books, promulgated by Trump’s Labor Department, which said if it quacks like a duck, all that matters is what’s most advantageous for the duck’s keeper.
Rulemaking is a prolonged process; the department will spend the next month and a half collecting comments on its proposal and then must take more time to finalize and effectuate its ruling. Once the rule is made official, however, its ramifications will be considerable—and considerably positive.
The DOL isn’t the only part of Joe Biden’s administration that has been considering this change. Under the leadership of General Counsel Jennifer Abruzzo, the National Labor Relations Board has been inching toward a decision that could rule the misclassification of workers as independent contractors to be an unfair labor practice, which would change their status to employees and make them eligible to form a union. For that matter, though it’s nowhere to be found in today’s 184-page proposed rule from the DOL, the reclassification of workers as employees that it envisions would also make them eligible to form unions.
Which just reconfirms the happy reality that the Biden administration is the first since Lyndon Johnson’s—or perhaps, since Harry Truman’s—that understands that progressive government and the Democratic Party need unions if they are to prevail.
