The Bing search engine website on a laptop computer arranged in the Brooklyn borough of New York, on Wednesday, Jan. 18, 2023. Microsoft Corp wants to adopt more OpenAI technology in its Bing search engine, Office productivity applications, Teams chat program and security software. MUST CREDIT: Bloomberg photo by Gabby JonesThe National Labor Relations Board issued a new ruling Tuesday that makes it easier for Uber and Lyft drivers, construction workers, home health aides, and strippers to organize and join unions.
Existing labor law extends the right to unionize only to workers with employee status, excluding independent contractors. Tuesday’s board ruling broadens the factors considered in the federal government’s test for determining a worker’s status as an independent contractor or an employee.
“Applying this clear standard will ensure that workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections,” NLRB Chair Lauren McFerran said in a statement.
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The reversal of a 2019 independent-contractor decision could affect millions of low-wage workers across the United States. About 16 percent of Americans have earned income in the gig economy, according to a 2021 Pew research study.
In a 3-to-1 vote, Democratic board members sided against the Atlanta Opera, which has said that its hair and makeup stylists who are seeking to unionize are not employees but independent contractors. The NLRB ruled that the hair stylists are employees with union rights under the National Labor Relations Act, an about-face from the standard set in 2019.
The board will now return to a 2014 framework for determining worker classification, rejecting a Trump-era test that elevated a worker’s “entrepreneurial opportunity” as the key factor in determining a worker’s employment status. The board’s new framework takes into account a variety of factors, including the extent of employer control over working conditions and whether a worker is being supervised.
The new rule could affect workers in a variety of sectors, from long-haul truck drivers to construction workers, who are often classified as independent contractors and denied the right to form unions and organize to improve working conditions.
“This case and the independent-contractor standard bears on the job quality of many workers in the United States,” said Brian Chen, policy director at Data & Society, a nonprofit technology research organization. “When workers are misclassified under the National Labor Relations Act, it deprives them of the collective bargaining that we know improves job quality, wages, and racial income and wealth gaps.”
The stakes are particularly high for workers in the app-based gig economy. High-profile companies such as Uber, Lyft and Instacart have poured tens of millions of dollars into ensuring that their workers remain classified as independent contractors. The decision could also be appealed in a federal court, where its survival would be uncertain.
The GOP-dominated labor board ruled in 2019 that Uber drivers are independent contractors and are not granted union protections under the National Labor Relations Act. That decision could now be overturned if Uber drivers try to unionize again.
Uber and Lyft did not immediately respond to a request for comment.
The Labor Department is also separately considering a new rule that would make it more likely for millions of workers, including those in the gig economy, to be classified as employees rather than independent contractors. That move would be separate from the NLRB decision.That proposed rule could require companies that employ gig workers to provide basic benefits and protections, such as the minimum wage, overtime pay, and contributions to Social Security and unemployment insurance, that they currently do not receive. Gig workers could find it easier to unionize under new ruling
