WASHINGTON—In another Donald Trump regime slam at workers, a proposed Labor Department “joint employer” rule could cost at least 595,000 more workers, already exploited by low pay, no benefits, and bad conditions, at least $3.7 billion yearly, the Economic Policy Institute says.
The yearly loss to individual workers would range from “a minimum of $6,294 for retail sales workers, under extremely conservative assumptions, to a minimum of $23,266 annually for truck drivers,” EPI calculates.
And all that money would stay in corporate pockets, the labor-backed think tank protested to Daniel Navarrete, the Regulations Director for the Trump DOL’s Wage and Hours Division.
The only joint employers under the Trump DOL’s proposal would be those who directly control all aspects of the worker’s job, from her uniform to his hours to her working conditions to his delivery vehicle.
Democratic President Joe Biden’s “joint employer” rule, which Trump would repeal—thus evading Congress—includes indirect control of the worker and more factors the employer must meet to get away with not obeying labor laws.
EPI President Heidi Shierholz, a former chief economist for DOL, and two of her top analysts urged Navarrete to dump the proposed rule, and keep the Biden-era worker joint employer protections that Trump demands to erase.
House Education and Labor Committee Democrats lodged their own protest on June 22. They said workers would lose a billion dollars a year and demanded DOL’s Acting Secretary, Keith Sonderling, drop the idea.
The difference between the two objections is EPI says the Trump regime’s rule would let bosses not only bounce workers from pillar to post trying to figure out who their “employer” was—say, McDonald’s corporate headquarters or your local McDonald’s franchise—but would also let the bosses turn those 595,000 workers into “independent contractors.”
Those 595,000 would then join a minimum of 12 million current independent contractors who already suffer from that status, EPI says. The lawmakers didn’t discuss the independent contractor issue.
“And because of occupational segregation and other labor market disparities, people of color, women, and immigrants—and people at the intersections of these categories—are more likely to be in occupations where misclassification” as independent contractors “is common,” EPI warns.
Workers whom Trump would harm toil in “lower-wage, labor-intensive jobs such as call center workers, landscaping workers, janitors and cleaners, home health aides, truck drivers, delivery workers, manicurists, housekeeping cleaners, retail sales workers, security guards, and construction workers,” EPI adds.
EPI did not say so, but workers of color disproportionately hold those jobs. Recent federal data shows one of every two construction workers is Latino, as are 45% of farm workers. Blacks and Latinos combined make up majorities of home health care aides (55%), cooks (57%), postal workers (60%), janitors (52% of 2.2 million total), and maids (68% of 1.4 million total), for example.
Unlike “employees” under labor law, including employees who face the “joint employer” confusion, independent contractors have no worker rights, can’t unionize, must pay both the employer’s and the worker’s share of Medicare and Social Security payroll taxes, can’t get jobless benefits, and can’t get workers’ comp.
All that money would stay in bosses’ pockets, as bosses would be able to “save” $370 million in payroll taxes and not having to pay workers’ comp or unemployment benefits.
Both protests were scathing about DOL’s plan. Neither, however, affects the “joint employer” rule under the National Labor Relations Act. The NLRB, which oversees that law, has its own definition of joint employer and is wrestling with the issue, too.
DOL’s proposal would cause chaos about the minimum wage and overtime pay—the Fair Labor Standards Act–unpaid family and medical leave, and a special law covering farmworkers, EPI and the lawmakers said.
It would also still leave workers in a quandary about who they should hold responsible for breaking those labor laws, or, under the NLRA, who to bargain with.
DOL’s proposal and the lawmakers’ June 22 letter are the latest chapters in a long-running partisan battle over “joint employers,” who they are and what they legally must do for workers.
On one side are workers, EPI, and the Democrats, led by Reps. Bobby Scott, D-Va., and Ilhan Omar, DFL-Minn., who gathered dozens of signatures on their protest. They want to ensure workers know who is responsible for wages, overtime pay, allowing family leave and obeying or breaking the NLRA.
On the other is the Trump regime, which tried a similar but narrower stunt late in his first term—so late that Democratic President Joe Biden was able to revoke it in early 2021. Then and now, both the lawmakers and EPI say, Trump is catering to the corporate moguls.
“By limiting who an employee can hold responsible for federal labor law violations, the department’s proposal would shield larger businesses whose business model relies on subcontracting with thinly capitalized subcontractors or farm labor contractors that cut corners on federal labor law compliance,” Scott, Omar, and the other lawmakers wrote.
“If the thinly capitalized subcontractor or farm labor contractor is unable to pay back wages or judgments owed, then workers would be unable to recover from any employer.”
The lawmakers seem to give Trump’s Acting Labor Secretary Sonderling the benefit of the doubt that he doesn’t know what his own department is doing. “As you may be aware, in recent years, an increasing number of workers are employed by intermediaries as leased employees and permatemps, and by subcontractors, rather than directly employed,” their protest letter opens.
The lawmakers say nothing, though, about potentially turning the leased employees and permatemps into independent contractors, which would make their situation even worse.
“The proposed rule conflicts with Congress’s intent to define the employment relationship broadly to better protect these types of workers from substandard labor conditions.”
Congress, in those three laws, and the courts, in decisions since the Fair Labor Standards Act was enacted during the New Deal, “define joint employment status broadly by applying an economic realities test to help ascertain whether the employee is ‘economically dependent’ on the potential joint employer. While different courts use different factors, the ultimate question is that of economic dependence,” the lawmakers wrote.
EPI elaborated on that concept. Trump’s Labor Department “seeks to once again upend the clear, long-standing ‘economic reality’ test, which examines multiple factors to get to the central issue of worker classification: Is the worker truly in business for themselves, or do they depend economically on finding work in the business of others, under the control and terms of the employer?”
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