Biden wants to let gig workers be employees. Here’s why it matters.

Labor advocates say the measure would be a big win for workers. Companies say it would raise costs and create uncertainty.

Delivery companies such as DoorDash rely heavily on independent contractors. (Andrew Kelly/Reuters)

The Labor Department has proposed a rule that would make it easier for delivery drivers, janitors, construction workers and other independent contractors to be considered employees, granting them access to benefits and federal labor protections.

The proposal would overturn a Trump-era move and restore Obama-era standards for determining whether workers qualify as employees or independent contractors.

“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” Secretary of Labor Marty Walsh said in a statement. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.”

Inflation is helping gig companies like Uber and hurting their workers

The proposal must face a public comment period and would take months to go into effect if approved. Companies that are dominant in the gig economy such as Lyft and Uber, whose business models revolve around independent contractors, oppose the change, saying it would be costly and create unnecessary complications.

Here’s what you need to know.