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UPDATE 1-Enforcing gig worker rights gets a boost in Biden's budget

·2 min read

(Adds details from Trump budgets, details and background) 

  By Nandita Bose and Chris Sanders 

  WASHINGTON, May 28 (Reuters) - U.S. President Joe Biden wants to boost the budget of a Department of Labor unit that investigates whether gig workers are misclassified as independent contractors and thus missing out on benefits they are entitled to. 

  The White House on Friday unveiled a $6 trillion budget proposal that would ramp up spending on infrastructure, education and combating climate change, arguing it makes good fiscal sense to invest now, when the cost of borrowing is cheap, and reduce deficits later. 

  The administration is "committed to ending the abusive practice of misclassifying employees as independent contractors, which deprives these workers of critical protections and benefits," Biden's budget document says, adding that it will include funding for "stronger enforcement." 

  The budget request, which was sent to Congress on Friday, includes an 18 percent increase in outlays for the department's Wage and Hour Division in the 2022 fiscal year over the actual amount it received in 2020, and a 14 percent increase in the funds the department is expected to receive in 2021. 

  The division was largely ignored under former President Donald Trump. Trump proposed a 1.7 percent increase in funds for the division in his budget for fiscal 2021. In fiscal 2020, he proposed a 1.3 percent increase. 

  The division's inspectors conduct investigations into whether contract workers have been properly classified and are missing out on the full benefits package such as overtime and minimum wage given to workers classified as employees. 

  Earlier this month, Biden's Labor Department rescinded a Trump-era rule that would have made it easier for businesses to classify workers as independent contractors instead of employees under the federal Fair Labor Standards Act (FLSA). 

  In late April, Labor Secretary Marty Walsh told Reuters a lot of gig workers in the United States should be classified as "employees" who deserve work benefits, suggesting a shift in policy that is likely to raise costs for companies that depend on contractors such as Uber and Lyft. 

  Under Walsh's leadership, the department is now likely to investigate how the pay and benefits gig workers receive stand up against the FLSA, labor lawyers, unions and former policy makers said. 

  The Wage & Hour Division under previous Democratic presidents has attracted criticism from Republicans and the business community for being overly aggressive with investigations. (Reporting by Chris Sanders and Nandita Bose; Editing by Steve Orlofsky and Sonya Hepinstall) 

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