Biden's proposed gig worker rule could deal a major blow to small businesses

The Biden administration has proposed a new rule that could re-classify millions of gig workers as employees, a move that could deal a significant blow to small businesses across the country.

The Labor Department on Tuesday unveiled a new proposal that would make it more difficult for companies to classify their workers as independent contractors — a change that could have major consequences for ride-hailing, delivery and other industries that depend heavily on gig workers.

Companies are required to provide certain benefits and legal protections to employees but not contractors, making employment of those types of workers more expensive. That includes minimum wage, overtime, Social Security and Medicare payroll taxes, unemployment insurance and workers' compensation insurance.

In determining whether a worker qualifies as an independent contractor or not, the Labor Department said it would take into consideration the worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer’s business," among other factors.