A Tennessee free-market nonprofit group, the Beacon Center of Tennessee, has filed a federal lawsuit challenging a new labor rule implemented by the Biden administration. The rule alters the criteria for classifying workers as independent contractors or employees, raising concerns among freelancers like Margaret Littman and Jennifer Chesak.
The lawsuit, filed in Nashville, argues that the new rule could potentially force freelancers into undesirable employment arrangements or prevent them from working altogether. This legal challenge is part of a broader pushback against the rule, with other organizations and business coalitions also contesting its implications.
The rule, approved in January and set to take effect on March 11, replaces a previous standard set during the Trump administration. It aims to prevent the misclassification of workers as independent contractors, ensuring they receive minimum wages and benefits like health coverage and paid sick days.
Labor advocates have welcomed the rule, citing instances of worker exploitation due to misclassification. On the other hand, business groups have expressed concerns about the uncertainty it creates for employers and the potential impact on enforcement by the Labor Department.
The Beacon Center's lawsuit challenges the Labor Department's authority to change the rule and argues that the new criteria could lead to increased misclassification of freelancers as employees. The rule directs employers to consider six criteria when determining worker classification, without giving precedence to any specific factor.
Notable app-based platforms like Uber and Lyft have indicated confidence that the new rule will not require them to reclassify their gig drivers. These companies are also part of the business coalitions contesting the rule in court, emphasizing the significance of this legal battle for the future of independent work arrangements.
