The Biden administration wants to make it easier for gig workers to be full-time so Uber drivers and home health workers could qualify for benefits and better pay

• The Labor Department announced a proposal making it easier for gig workers to be classified as employees.
• That means they will be eligible for more benefits, more protections, and better pay.

A new announcement from Biden signals a big win for gig workers in the US.

That's because the Labor Department announced a proposal on Thursday that would make it easier for millions of gig workers to be classified as employees through their companies, instead of independent contractors, which they currently are. That's potentially game-changing for millions of workers, who include custodial workers, home healthcare aides, construction workers, and rideshare drivers, amongst others.

Under most federal and state labor laws, a company only has to provide benefits, like a minimum wage and medical leave, to their employees, and not their contractors.

"While independent contractors have an important role in our economy, we have seen in many cases that employers mis-classify their employees as independent contractors, particularly among our nation's most vulnerable workers," Secretary of Labor Marty Walsh said in a press release.

Turning full-time roles into contracted roles is one way that companies still wield power over workers, and can cut wages down by 4% to as much as 24%, according to a Treasury Department report.

"Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages," Walsh said. "The Department of Labor remains committed to addressing the issue of misclassification."

Walsh has hinted at the proposal before, saying as early as last April that most gig workers should be recognized as employees. The Department of Labor will accept comments on the proposal through November 28.

It's no secret that gig work has been spreading, as the rise of on-demand apps necessitated the rise of on-demand workers. Even in a red-hot labor market, where full-time job openings abound, gig work has boomed. But the majority of Americans working as contractors have said they would prefer to be working as permanent employees, according to a 2021 survey from McKinsey and Ipsos.

With millions thrown into unemployment during the pandemic, contracted work saw an influx of interest. A December 2021 report from the Pew Research Center found that 16% of Americans had earned money through an online gig platform — and that 31% of gig workers said it was their main job over the previous year. That number was higher for workers who are lower-income. Broadly, 46% of gig workers said companies were "unfair" on benefits.

During the pandemic, women especially flooded into the gig economy, with many contending with balancing ever-changing childcare, pandemic circumstances, and keeping their families afloat. But those women earned less than their male peers in the gig economy.

Contractors were also formally recognized in initial pandemic relief. Part of the expansion of unemployment benefits, which also included an additional $600 and then $300 a week, made gig workers eligible for benefits for the first time.

“A federal rule on the determination of independent contractors has been long awaited,” Patricia Campos-Medina, executive director of the Worker Institute at Cornell University’s School of Industrial and Labor Relations, told Insider. “We are going back to having a basic standard, which is helpful for worker advocates across the country.”

The Labor Department announcement comes after years of organizing from labor activists pushing for gig workers to be classified as full employees. In 2020, for instance, rideshare giants like Uber, Lyft, and Instacart fought hard to pass Proposition 22 in California, which designates app-based drivers as contractors. The passage of the law meant that the companies wouldn't have to pay for their workers to receive full employee benefits, emboldening CEOs to pursue even stricter legislation. Prop 22 was later ruled to be unconstitutional by a California judge, however.