On Monday, in the vain hope that Americans might forget about his economically disastrous war against Iran, President Trump attempted a symbiotic stunt with DoorDash in which he summoned Sharon Simmons, a 58-year-old who lives in Arkansas and works for the company, to deliver him lunch from his favorite restaurant: McDonald’s. The goal, with tax day looming, was to remind Americans about the “no taxes on tips” provision in the GOP’s One Big Beautiful Bill that passed last year. Alas, it turned out that this humble “DoorDash grandma” had previously lobbied in D.C. for that provision, and the savings she attributed to the new law most likely were not due to that law at all.
But the event did illustrate a bleak economic reality: Simmons said she needed the money to help pay her husband’s medical bills from cancer treatment, and to do so she is turning, like an increasing number of workers, to the gig economy.
The gig economy—which also includes rideshare services like Uber and handyman apps like Taskrabbit—is relatively new, but some of the issues its workers face are longstanding. One of the biggest is how to determine who counts as an employee versus an independent contractor. The distinction can make a huge difference to both businesses and workers, because the latter are covered by rules on overtime pay, workplace harassment, family and medical leave, and more.
The Biden administration expanded the definition of an employee in order to try to cover more workers employed in the gig economy. Now, though, the Trump administration is attempting to roll back the definition in a way that, as a new report from the Economic Policy Institute Report shows, could cost the most vulnerable workers thousands of dollars and leave them less safe in the workplace.
The question of who is an independent contractor versus an employee might sound easy to answer, but it’s actually a complicated legal test laid out by the Department of Labor. On one end, a truly independent, self-employed person has total freedom over their schedules, their work, who they work with, how much they are paid, and when they get days off. On the other is a traditional employer arrangement with guaranteed paychecks and a company who contributes to unemployment insurance and social insurance programs. In-between is a gray area of temps, contract workers, on-call workers, and independent contractors—all of which are distinct categories in the eyes of the government. In July 2023, according to the most recent data from the Bureau of Labor Statistics, there were 11.9 million independent contractors to whom the Trump rule change would apply, accounting for 7.4 percent of total employment—a share that has steadily risen in recent decades, as union membership has declined and Washington has further deregulated work and the economy.
App-based jobs are just one manifestation of a longer trend of more workers being classified as independent contractors. The classification has traditionally relied on a three-pronged test that involves how much control the worker has over their work, whether it’s outside the usual course of the business for the employer (like a law firm employing janitors for its office building), or the individual works in a business where independent contractor arrangements are traditional and common (like freelance writers). The rise of apps like Uber and DoorDash led to drives to classify those workers as employees rather than independent contractors, igniting huge legal battles in California. Companies that rely on the gig economy have lobbied for the status quo, arguing that app-based jobs are typical of independent contractor arrangements.
But economists and labor advocates have long said that employers are misclassifying workers as independent contractors because workers are often performing the same core functions that employees would and the companies are failing one or many components of the test. Several examples, like a class-action lawsuit brought by FedEx drivers in California and the decision by a home health startup not to rely on independent contractors, show that those assessments are often correct. “What we see is employers are still exerting so much control over how work is done for independent contractors, but they’re not being held liable as employers,” said Dr. Kate Bahn, the chief economist and senior vice president of research at the Institute for Women’s Policy Research.
In a report released Wednesday, the Economy Policy Institute looked at the fields where workers are most likely to be misclassified. The list was filled with old-fashioned jobs like construction workers, truck drivers, home health and personal care aides, and manicurists and pedicurists. “It’s happening to a lot of workers outside of the gig and app space, even though I feel like gig and app [companies] have been taking up a lot of air, and that is largely too because these companies have also lobbied a lot to … carve out drivers or gig workers from employment status in the state laws,” said Margaret Poydock, a senior policy analyst at EPI.
The report found that, on average, a worker who should be counted as an employee but is being treated as an independent contractor could lose thousands of dollars per year, depending on the industry, and as much as $20,399 for construction workers. Workers stand to lose even more in states where wages are higher. These workers also miss out on workplace benefits like paid leave and health insurance, and they foot the entire bill for their contributions to social security and Medicare, instead of splitting it with their employers. It’s also harder for them to get promotions or raises, reducing their long-term wealth.
Determining whether a worker is misclassified would require active enforcement by the Department of Labor, or an employee to challenge their status in court. But presidents can dramatically shape the lives of all of these workers by how they try to define and enforce the rule. Under President Joe Biden, the Labor Department adopted a change that expanded the definition of an employee to include the economic realities of a worker’s life and included six questions, all given equal weight, to determined how much control the person had over their day and their tasks, the degree of permanence of the work, whether the work the employee performed was integral to the business’s reason for being, and the skill and initiative involved in the job. It went into effect in March 2024.
But as soon as Trump was re-elected that November, he signaled that he would not enforce it. The rule change to roll it back, which was submitted in February, would focus on two questions above others: the nature and degree of control over the work and the worker’s opportunity for profit or loss. It sets aside many of the other questions, and argues that Biden’s broadened definition of employees was confusing and ignored the realities of the modern economy. (The public comment period for the proposed rule change ends April 28.)
Workers do like flexibility, although nothing is preventing businesses from giving their employees more flexibility while also fulfilling their obligations as full-time employers. “Sometimes I think when people try to discuss what they think are the benefits of independent contracting work, those things are available to direct employees as well. I think it’s a little bit of a false choice,” Bahn said.
But the services that rely on independent contractors, like DoorDash, are operating in an economy that relies on being responsive to demand moment by moment—a demand that was created in part by these apps themselves. And they remain popular, both to customers and to workers who want to make extra money. “When workers say they value flexibility, they often mean more than just scheduling,” said Kristin Sharp, the CEO at Flex, an industry group for rideshare and food delivery platforms. “They mean income that is responsive to the rest of their lives, and that fits around family, health, education, financial, or entrepreneurial goals.” She pointed out that a lot of gig work has low barriers to entry and quick payouts.
Flex supports Trump’s proposed rule change, as do many other industry groups, while many labor advocates and think tanks oppose it. More than 2,200 comments have been submitted so far—though many of them use the same language, having obviously been supplied by groups on opposing sides. There’s no comment yet from anyone named Sharon Simmons.
