On January 4th, 2022, the United States Senate officially received President Biden’s nomination of Dr. David Weil’s nomination to serve as the Wage and Hour Division Administrator at the Department of Labor. While Dr. Weil is undoubtedly qualified to lead the Department of Labor’s Wage and Hour division, his nomination represents the Biden Administrations’ continued attack on independent contractors, the gig economy, and those who earn additional income outside a traditional nine to five.
The Senate must reject Weil’s nomination to allow independent contractors and gig workers to continue working in an employment structure that they overwhelmingly approve of and an employment structure that allows them to earn additional income.
In 2021, Upwork estimated that 36% of American workers were independent contractors, contributing about $1.3 trillion to the U.S. economy. Unlike traditional employees, independent contractors have greater flexibility in their hours and how they complete assigned work.
Despite the significant number of Americans participating in the gig economy, President Biden has engaged in a war on gig workers and independent contractors that culminated in Weil’s nomination. While campaigning for the presidency, Biden pledged to crackdown on firms that use independent contractors and revoked a Trump administration rule that would have provided greater clarity for gig workers and independent contractors shortly after entering office.
While serving as Wage and Hour Administrator under then-President Obama, Weil was responsible for crafting a hostile regulatory environment for independent contractors. In 2015, Weil issued an Administrative Interpretation that crafted an economic realities test that provides “a broader scope of employment than” the previously used “common law control test.” The shift away from the common law test, which focused on “the employer’s control over the worker,” to an economic realities test that focuses on “whether the worker is economically dependent on the employer or in business for him or herself.” This shift would ultimately see most workers classified as employees.
Weil also supported a lawsuit brought by the Massachusetts Attorney General against Uber and Lyft.
Were Weil to be confirmed by the U.S. Senate, he would undoubtedly continue to target an employment structure with overwhelming approval by those who participate in it. For example, in October 2021, Statistica found that 80% of independent contractors were satisfied with independent work, well above the national average of just 53.7%. Moreover, 78% of independent contractors cited flexibility as the main reason they overwhelmingly approve of gig work.
With such high levels of approval, it is abundantly clear that cracking down on independent contractors risks denying them the opportunity to participate in an employment structure they approve of. Additionally, such high approval rates dispel the notion that companies exploit independent contractors to increase profitability.
Independent contractors also choose to participate in the gig economy because it allows them to earn more money than through traditional employment. Upwork’s Freelance Forward study found that 44% of independent contractors “earn more than their traditional jobs.”
Policymakers and federal regulators must recognize this fact because it shows gig work enables a large number of Americans to earn more money than traditional employment and provides clear evidence that limiting the number of people who can work as independent contractors could deny millions the chance at a better life and enhanced economic security. As independent contracting becomes a more prominent part of the American economy, federal lawmakers and agency officials must craft a regulatory environment that supports this alternative employment structure, not one that depresses it. Doing so will only deny Americans the opportunity to participate in an employment structure they overwhelmingly approve of but also one that allows millions to earn more money.