The U.S. Department of Labor announced a rule that would classify gig workers as contractors rather than employees, according to The New York Times (subscription).
The rule: The new rule identifies two main factors as determinants of whether a person should be classified as a contractor or an employee.
- The first is how much a company controls the way a worker performs his or her job.
- The second is how much a worker can profit based on initiative, as opposed to earning a steady salary regardless of performance.
The upshot: The rule could likely shift the employment status of millions of Americans, including many in manufacturing. If they use contractors, companies do not have to pay the minimum wage, overtime, a portion of social security taxes, or unemployment insurance and workers’ compensation insurance.
A word from the NAM: “When finalized, the rule could solidify the use of independent contractors, including in manufacturing. Independent contractor arrangements benefit companies and workers by increasing flexibility and streamlining the human resources processes,” explains NAM Director of Labor and Employment Policy Drew Schneider. He adds:
- “Manufacturers are currently operating under a confusing patchwork of state and federal laws that have defined independent contractors in numerous ways, causing legal uncertainty and unnecessary compliance costs.”
- “Manufacturers and their business partners will benefit from a clear and updated independent contractor standard that protects this important business practice and allows NAM members to focus on producing America’s essential goods and services.”
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org