October 26, 2020 - Washington, D.C. – Last week, U.S. Senator Catherine Cortez Masto (D-Nev.) joined U.S. Senator Sherrod Brown (D-OH) and a group of her Senate colleagues in a letter urging U.S. Department of Labor (DOL) Secretary Eugene Scalia to rescind a proposed rule regarding classification of workers as employees under the Fair Labor Standards Act (FLSA). The rule proposes a misguided test to determine if a worker is an employee under the FLSA, failing to address misclassification of workers as independent contractors. This creates incentives for employers in all industries to further misclassify workers who should be protected by the FLSA. If finalized, this rule would exclude millions of workers from critical minimum wage and overtime protections, contribute to stagnating wages, and exacerbate economic inequality for American workers, particularly workers of color.

“Workers of color are disproportionately represented in industries in which the use of independent contractors and workers’ misclassification is increasing,” wrote the senators.“By encouraging more employers to classify their workers as independent contractors, this proposed rule would exacerbate the racial wage and wealth gap. Black and brown workers experience more economic insecurity than white workers. This is directly linked to systemic inequities that result in workers of color being paid less than white workers and their over-representation in low-wage sectors. Lower earnings leave Black and brown workers with much less in retirement savings, if they have any at all. Workers of color are also much less likely to have paid leave benefits or be able to work remotely. The COVID-19 pandemic has brought into sharp relief the acute consequences that inadequate paid sick days, paid leave, and employer-provided health insurance can have on workers in alternative work arrangements. Those consequences are even greater for Black and brown workers, who disproportionately hold frontline jobs.” 

The senators continued, “It is unconscionable that DOL, the agency tasked with enforcing the FLSA, is proposing to exempt millions of workers from the law’s safeguards. By issuing this proposed rule, particularly during a pandemic when millions of workers have lost their jobs and millions more are lacking critical benefits because they are classified as independent contractors, DOL makes clear that its intent with the rule is not to protect workers but to rubber-stamp corporate profit-maximizing schemes responsible for the hollowing out of the American middle class and growing the racial wealth gap.” 

A full copy of the letter can be found HERE. 

BACKGROUND:

In June, Senator Cortez Masto led a letter with Senator Sherrod Brown (D-Ohio) and eight fellow Senators to the Department of Labor (DOL), asking the Department to clarify how states can best ensure gig workers and other independent contractors the unemployment benefits they deserve quickly and that those benefits are not inappropriately used to justify misclassifying these workers down the road.
Source: Senator Catherine Cortez Masto