It’s Time to Get Off the Misclassification Merry Go Round

A couple of weeks ago, the Department of Labor proposed a new rule that would make it easier to classify some workers as independent contractors. Specifically, the new rule would narrow the factors used to determine if a worker is an employee or an independent contractor from six co-equal factors to two priority factors: 1) the nature and degree of control over the work and 2) their opportunity for profit or loss.

The media covered the announcement as a major roll-back of Biden-era regulations. And this is technically true. In 2024, the Biden Administration implemented a rule of their own that established the six co-equal factors to determine worker classification. So this new Trump Administration rule would undo that Biden-era regulation. And yet, the Biden rule just rolled back a 2021 rule implemented by the first Trump Administration, which was in turn rolling back Obama-era regulations.

We’ve been stuck in the same cycle for years, without delivering real economic security for gig workers. It’s time for a new strategy.

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Classification is a big deal because most labor protections and benefits are tied to employment. So for example, the Department of Labor’s new proposed rule applies to three laws: the Fair Labor Standards Act (which grants minimum wage and overtime rights), the Family Medical Leave Act (which grants the right to take unpaid time off work to care for a family member), and the Migrant and Seasonal Agricultural Worker Protection Act (which grants protections for agricultural workers).

Only workers who are deemed “employees” under these laws benefit from their protections. Independent contractors aren’t covered.

These exclusions date all the way back to the New Deal, when Congress passed new labor laws that established the right to collectively bargain, minimum wage and overtime, the 40 hour workweek, as well as Social Security and Unemployment. Unfortunately, the system was never truly universal. Agricultural and domestic workers—occupations held primarily by Black workers—were excluded from New Deal protections in order to win Southern Dixiecrat votes. The self-employed were also excluded.

Today, many of these jobs are still disproportionately held by women and people of color. According to the Economic Policy Institute, 90% of domestic workers are women, and 51% are Black, Hispanic, or Asian American and Pacific Islander. Federal farm labor data shows that 63% of farm laborers are Hispanic—only 33% are White. These trends extend to self-employment; 96% of Black-owned businesses and 90% of women-owned businesses are businesses-of-one. And Black and immigrant workers are overrepresented in the industries where misclassification occurs today, such as construction, truck driving, and home care.

So yes, classification rules matter, because they are the gateway to a broader set of labor protections. Excluding workers from employment classification excludes them from the benefits we all deserve. And yet, we have poured significant resources into this misclassification fight, with little to show for it.

When California passed AB5 in 2019, it marked a major victory for those seeking to expand employment rights via classification rules. AB5 implemented a very strict worker classification test (the ABC test) that would have reclassified many independent contractors as employees, granting them labor protections under the law.

But gig platform companies—Uber, Lyft, Doordash, and Instacart—spent $224 million to pass Prop 22, which classified their workers as independent contractors in exchange for a set of narrowly defined benefits, including health care stipends, minimum earnings guarantees, and occupational accident insurance. Recent studies show these benefits are extremely limited and lack meaningful enforcement mechanisms.

Meanwhile, concerns that the law would undermine independent creative work led lawmakers to pass a second law, AB2257, which excluded many creative industries from the rules altogether. Ultimately, AB5 failed to deliver expanded protections to many of the workers it hoped to support.

The broader litigation landscape tells a similar story. The largest misclassification settlements – GrubHub’s $24.75 million deal with 60,000 California delivery drivers, Lyft’s $27 million settlement, Uber’s earlier $100 million proposal – are all monetary only. They don’t reclassify any workers.

Ultimately, the mechanisms for fighting misclassification are individual and adversarial: a worker files a complaint, an agency investigates if it has capacity, a lawsuit proceeds if someone can afford an attorney. Even when these cases succeed, the settlement comes as a one-time check that may not cover the full statutory period, often excludes workers who’ve since moved on, and almost certainly won’t result in reclassification or new protections.

Winning a misclassification case doesn’t make a worker whole; it recovers a fraction of past losses while leaving the structural conditions that produced them entirely unchanged. If the goal is to actually get protections to the workers who need them, misclassification legislation and litigation can’t be the whole strategy.

Worker advocates are coming to the same conclusion, and experimenting with different strategies to expand labor protections to excluded workers.

Several jurisdictions, including New York City, Massachusetts, Minnesota, Washington State, and California have passed sector-based pay standards for app-based drivers, with others considering similar proposals. In New York City, Los Deliveristas Unidas succeeded in passing a first-of-its kind minimum wage law for app-based delivery workers.

These minimum wage laws are remarkable for a couple of reasons. First, they win labor protections for an entire sector through advocacy rather than collective bargaining, avoiding the need to negotiate employer-by-employer. That approach addresses one of the biggest barriers to organizing independent workers: they are not concentrated in a single workplace.

Second, these minimum wages are designed to reflect the real costs of self-employment. In Seattle, for example, the $28.19 hourly minimum incorporates not only the city’s $16.39 minimum wage for large employers, but also drivers’ vehicle expenses, health insurance, payroll taxes, and license fees. The same model could be adapted for other forms of independent work by accounting for occupation-specific expenses, such as materials for visual artists, equipment for filmmakers, or physical therapy for dancers, alongside the cost of social protections like health insurance and paid leave.

Finally, these laws offer a powerful enforcement mechanism that is implemented by city agencies. New York City recently announced a $5 million settlement with delivery companies for violations of its Minimum Pay Rate for delivery workers. Instead of having to go to court individually or organize a class action suit, workers can rely on the government to enforce their rights.

Seattle’s 2019 Domestic Worker Ordinance offers another model. The law extends minimum wage, rest and meal breaks, and civil rights protections to nannies, house cleaners, and home care workers, regardless of classification. In doing so, it sidesteps the employee-versus-contractor fight and delivers baseline protections to the workers who need them.

In 2021, the city began developing a portable paid time off benefit for domestic workers through a partnership between the Seattle Domestic Workers Standards Board (DWSB) and a coalition of domestic worker organizations, with worker leadership at the center of the design. The portable benefits effort is still in development, but the process points toward a model in which workers define the priorities that matter most to them.

In many ways, the gig and domestic worker advocates are stepping off the merry-go-round of classification rulemaking entirely. They are demanding protections for the workers they represent—regardless of classification—and they’re winning.

Advocates for independent creative workers can learn a lot from their efforts. According to a recent study of artists, 34% of artists are fully self-employed, 50% are self-employed in their primary job, and 11% juggled three or more jobs in the past year. Creative workers are disproportionately excluded from the labor protections we all need and deserve.

Yet unlike other sectors, much of the creative sector is legitimately organized around project-based work. By and large, independent creative workers are not misclassified. It doesn’t matter to them whether there are two or six factors in a classification test. They won’t qualify for minimum wage and overtime protections either way. But they sure could use a minimum income. And they sure could use the right to organize.

We have amazing efforts in our sector, such as W.A.G.E, which sets and enforces minimum wage standards for artists. How might we build on those efforts? How might we learn from the successes of worker advocates in other sectors and even win government-mandated minimum wages and social protections in creative industries? Could we address the broad precarity in our industry through local sectoral bargaining councils?

The possibilities are endless, but only if we stop fighting about the means, and start focusing on the ends.

• How should we count artists? This new piece by Joanna Woronkowicz and Doug Noonan explores the ways our reasons for counting artists shape the methodological choices we make.

• New AI Roadmap for Arts and Culture Organizations from the DeVos Institute

• Even after the Justice Department settled the case against LiveNation, the trial continues (led by the states). See the latest from the Fix theTix Coalition.

• New survey of people enrolled in health insurance through ACA marketplaces shows widespread anxiety about affordability, now that subsidies have expired.

• Just in time for tax day, a thoughtful analysis from the Roosevelt Institute on the various tax reform proposals coming out of Congress

• The Supreme Court just ruled internet service providers aren’t liable for bootlegged music

• Sen. Andy Kim (D-NJ) introduced the American Stories Act (S. 4058), which would authorize NEA and NEH to: “foster projects, productions, and workshops through film, radio, video, and similar media, for the purpose of broadening public understanding of civics and the United States Constitution

• Colorado lawmakers introduced new legislation – the Colorado Artists Company Act – establishing the A-Corp, a new entity designed specifically for artists.

• Rep. Nydia M. Velázquez (D-NY), Senator Cory Booker (D-NJ), and Rep. Maxwell Frost (D-FL) introduced the Music In Our Schools Month Resolution to affirm the importance of music education and the Guarantee Access to Arts and Music Education Act of 2026 (GAAME Act) to improve access to music and the arts for disadvantaged and low-income students.

• May Day Strong is launching an art library for May Day organizers and attendees. They invite visual artists to submit graphic art that supports their efforts to build a pro-worker, pro-student, pro-immigrant, and pro-planet movement to take on the billionaires.