The Department of Labor announced Tuesday the final version of a rule that will force companies to recognize some workers as employees instead of independent contractors.
The new rule goes into effect on March 11 and rescinds a previous rule establishing independent contractors as a separate class of workers under the Fair Labor Standards Act that was put in place in January 2021 under the Trump administration, according to the DOL release. The rule could raise labor costs by up to 30% for employers who utilize independent contractors, such as app-based services like Uber or Lyft, which offer a freelancing model, as employers would have to adhere to minimum wage and overtime laws, according to Reuters.
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