Soaring inflation has caused more and more Americans to take a side gig to make ends meet. The Labor Department lofted a new proposal that would make it more difficult for companies to classify their workers as independent contractors. If the Biden Administration gets its way - businesses will have to re-classify their gig workers as employees --- a move that could hit small businesses across the country really hard. New gig worker rule could cause company's operational costs to skyrocket because of a change in business - like paying part of their social security tax. Anthony Shields of Houston Small Business Marketing says how this will effect small businesses. "It would definitely hurt them. Usually most of the small business I work with have contractors because of all the associated fees that they know will be associated with employees."
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Shields saying in this time of soaring inflation, his clients would probably have to raise the prices they charge their customers. "Absolutely! They would have no option. They have to maintain their company and have to do something to make a profit so they could live!"
Larger companies that primarily use contractors like driver services could be devastated. Uber and Lyft rely on their gig workers and say this would severely hurt the way they do business. While the proposal could give millions of workers employee status, it could also have potentially catastrophic consequences for small businesses already struggling with the hottest inflation in four decades and a persistent labor shortage.
The final rule is expected to come next year.
photo: Getty
small businesses often hire gig workers