New rule tightens worker classification standards; Uber, Lyft say their drivers won’t be affected

The Biden administration enacted a new labor rule Tuesday that aims to prevent the misclassification of workers as “independent contractors,” a step that could bolster both legal protections and compensation for millions in the U.S. workforce.

Major app-based platforms including Uber, Lyft and DoorDash expressed confidence that the new rule would not force them to reclassify their gig drivers. But business groups warned the rule creates uncertainty for employers and much depends on how the Labor Department decides to enforce it.

The Labor Department rule, which the administration proposed 15 months ago, replaces a Trump-era standard that narrowed the criteria for classifying employees as contractors. Such workers are not guaranteed minimum wages or benefits, such as health coverage and paid sick days.