The Trump administration is moving to redefine who counts as an employee versus an independent contractor—a distinction that could significantly affect gig workers, delivery drivers, and others in flexible work arrangements. The change walks back protections that expanded under Biden, signaling a shift in how labor rules will be enforced over the next several years.
The difference between employee and contractor status matters enormously. Employees typically receive overtime protections, coverage for workplace harassment, family and medical leave, unemployment insurance, and employer contributions to Social Security and Medicare. Independent contractors get none of these. They also typically have less negotiating power for raises and promotions, which affects long-term earnings.
Under the Biden administration, the Department of Labor adopted a broader definition of "employee" that considered the economic realities of a worker's situation across six equally weighted factors: how much control a company exerts over work, whether the work is permanent, whether it's core to the business, skill and initiative required, and worker opportunity for profit or loss. That rule took effect in March 2024.
The Trump administration's proposed rollback, submitted in February, would narrow focus to just two factors: control over the work and profit-or-loss opportunity. This approach favors the classification of workers as independent contractors, particularly in app-based services like rideshare and food delivery.
Economic research shows the stakes are substantial. An Economic Policy Institute report found that workers misclassified as contractors lose thousands of dollars annually. Construction workers face the biggest hit—up to $20,399 per year—but the problem spans many industries: truck drivers, home health aides, manicurists, and others. These workers also miss out on health insurance, paid time off, and benefits that split payroll tax obligations with employers.
The misclassification issue extends well beyond gig apps, though app-based companies have been the most visible in lobbying against employee status. Traditional industries have long relied on contractor classifications while exercising substantial control over how work gets done. Labor economists argue companies often fail the established legal test for true contractor work but face little enforcement consequence.
Enforcing these rules requires active oversight from the Department of Labor or legal action from individual workers. Presidential administrations shape enforcement priorities significantly. The Trump administration has signaled it will not enforce the Biden rule and is pushing through its own definition, arguing the expanded employee definition was confusing and ignored modern economic realities. The public comment period for the proposed change ends April 28.
While flexibility is genuinely valued by many gig workers, labor researchers note that nothing prevents employers from offering flexible schedules while still providing employee protections and benefits. The choice between flexibility and security is not as binary as companies often frame it.
Source: https://newrepublic.com/article/209192/trump-doordash-gig-workers-labor-rule-independent-contractors