The U.S. Department of Labor (DOL) has declared that more than 208,000 gig workers are due at least $163 million in back pay. The announcement was made by Acting Secretary Julie Su via social media, where she also revealed the establishment of a website to help workers determine if they are owed back pay.

Su underscored the importance of independent contractors in the economy and the new rule's role in preserving their position. "Let me be very clear. Independent contractors who are in business for themselves play an essential role in our economy. This rule will not change that," said Su. She further expressed confidence in the rule's potential to create fair competition among businesses and protect workers from wage theft due to misclassification. "We are confident that this rule will help create a level playing field for businesses, protect workers from wage theft caused by misclassification and affirm the vital role true independent contractors play in our economy by allowing them to thrive." Su added that the rule would provide greater clarity and consistency in determining a worker's status under the Fair Labor Standards Act.

A news release from DOL explained that the Fair Labor Standards Act offers guidelines on worker classification. The department believes this move will deter employers from falsely listing workers as independent employees, which facilitates wage theft and negatively impacts the economy. The guidelines aim to provide companies with a consistent framework for identifying workers and granting them "essential rights."

"Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections," Su noted. "This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned."

To classify an employee as an independent contractor, businesses must answer six questions about their relationship with the worker, according to the release. These factors include: any opportunity for profit or loss a worker might have; any financial stake or resources a worker has invested in the work; the permanence of the work relationship; the degree of control an employer has over the person’s work; whether the work is essential to the employer’s business; and a factor concerning the worker’s skill and initiative.