Nominee for Top Wage Regulator Carries Significant Implications for Worker Classification Debate

By Greg Hoff posted 05-07-2021 13:27


President Biden's intention to nominate David Weil, former Wage and Hour Administrator under President Obama, to fill the same position for his own administration portends actions by the administration to restrict the use of independent contractors.  Weil has been a frequent critic of gig companies and other employers for creating a "fissured workplace" and during his previous tenure broadly applied wage and hours laws to significantly restrict the independent contractor classification. 

The Obama years:  Weil’s tenure during the Obama years was associated with extensive use of investigatory authority to target establishments’ use of independent contractors pursuant to his “fissured workplace” theory.  That theory holds that many larger companies were shifting employment relationships and associated responsibilities to third party entities as a means of escaping liability. 

Weil’s nomination could have significant implications for the gig economy and the growing debate over worker classification and providing adequate protections for gig workers.  Since leaving the government, Weil has become a frequent critic of Uber and Lyft and has asserted that workers using apps developed by platform companies, such as Uber, are clearly their employees and thus entitled to full protections and benefits under the law.  

Stricter independent contractor rule?  If confirmed, Weil will undoubtedly have a large say in the Biden administration’s expected proposal of a new independent contractor regulation to replace the Trump-era rule the administration previously scrapped.  That rule had largely codified long-standing principles regarding worker classification. 

Secretary of Labor Marty Walsh voiced his clear support for classifying gig workers as employees in a recent interview with Reuters.  “We are looking at it but in a lot of cases gig workers should be classified as employees…in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” said Walsh. 

Outlook:  If Weil is confirmed, employers can expect increased investigations and enforcement actions from the Wage and Hour Division, particularly if their operations utilize independent contractors.  Other actions, including the appointment of Seth Harris – who has also voiced support for providing broader protections for contingent workers – as President Biden’s chief labor advisor, and Secretary Walsh’s recent statements regarding gig workers, provide a strong indication that the Department of Labor will approach worker classification in a manner that will significantly restrict the use of independent contractors and provide broader protections for gig workers.