LOS ANGELES—The incoming administration of President-Elect Joe Biden is set to block a Trump Labor Department rule change that would allow employers greater latitude in classifying workers as “independent contractors,” according to a Bloomberg News report.
The proposed Trump rule change appears in conflict with California’s “gig worker” law known as AB5, and directly affects the adult industry where most performers and on-set workers are hired on an independent contractor basis. Last September the California legislature passed an exemption from AB5 — which creates a stricter standard for who counts as an independent contractor rather than an “employee” — for “performance artists.”
But how that exemption might apply to adult industry performers remains unclear.
The Trump Labor Department rules would creates a new, looser “economic reality” test for deciding whether a worker can remain an independent contractor, or must be hired as an employee.
But on January 20, the day he is inaugurated as the 46th president, Biden plans to issue a memo that would “potentially freeze this rule and not allow it to be implemented,” Jen Psaki — Biden’s choice to serve as White House press secretary — told Bloomberg.
It is standard practice for new presidents to issue such memos, freezing any new federal rules announced by the previous president, but not yet published in the official Federal Register, a process which typically takes about 60 days, according to the Bloomberg report.
While the rule change would not overrule state laws, leaving AB5 in effect, attorney generals from 24 states have already lodged protests against the Trump rule, stating that it would cause harm to the very workers whom the Fair Labor Standards Act is designed to protect. In a statement, the attorney generals said that the new rule would “unreasonably broaden” the definition of “independent contractor.”
Under the “economic reality” test, the Department of Labor would allow employers to consider, “the extent of the worker’s control over the work; the worker’s opportunity for profit or loss based on initiative or investment; the amount of skill required for the work; the degree of permanence of the working relationship between the worker and the potential employer; and whether the work is part of an integrated unit of production.”
But the rule will likely never take effect under Biden, who has said that he supports AB5 and hopes to use it as a model for nationwide legislation.
But Biden has also proposed a federal emergency fund for gig workers that would cover paid leave up to $1,400 per week, or $72,800 per year, and would also make independent workers eligible for unemployment relief, as they are under the federal COVID economic aid bills.
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