Uber Technologies' (NYSE: UBER) stock price plunged 10% on Oct. 11 after the U.S. Labor Department unveiled a new proposal that will force employers to reclassify some independent contractors -- including janitors, construction workers, delivery workers, and ride-share drivers -- as full-time employees. Labor Secretary Marty Walsh said that misclassification "deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages."

Uber, Lyft, DoorDash, and other gig economy companies had previously faced a similar assembly bill (AB5) in California, which they collectively countered with a ballot initiative called Proposition 22. Prop 22 was approved by the state's voters in late 2020 but subsequently ruled unconstitutional and unenforceable by a court in August 2021. Uber and its industry peers are appealing that ruling.

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Source Fool.com