New Labor Rule Means Gig Economy Workers In Texas Can't Get Unemployment Benefits

Last month, the state’s labor regulator approved a controversial new rule on gig economy workers – a rule opponents say will have negative implications for these workers going forward.

Approved on a 2-1 vote, the rule from the Texas Workforce Commission exempts app-based companies that hire contractors – like TaskRabbit or DoorDash – from paying state unemployment insurance taxes for those workers. The three-member commission gave initial approval for the rule in December.

Labor unions and workers advocates say the new rules were tailor-made by lobbyists from a firm called Handy. The agency has defended its rule-making process, saying it is well within its legislatively appointed rights to rule on employment matters and that, per state law, it allowed 30 days of public comment before initially adopting the rules. Opponents have said the rules could incentivize companies to abandon brick-and-mortar businesses to avoid paying those state unemployment taxes.

The risk is that the rule would likely reclassify many construction workers as independent contractors, leaving them without those protections for wage theft and discrimination on job-sites.

Read more: KUT Article