Afternoon Coffee: Biden blocks Trump-era regulation for gig workers; Basware adds supplier diversity data; White House won’t invoke Defense Production Act for semiconductors

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The Biden administration will block a Trump-era regulation that would have made it easier to classify gig workers as independent contractors, according to the Wall Street Journal.

The Labor Department is acting this week to block the rule before it would have been implemented Friday. The rule would have made it more difficult for gig workers to be considered an employee under federal law. Having the status of an employee, rather than a contractor, means gig workers are covered by federal minimum-wage or overtime laws, the article said.

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For decades, app-based services have been allowed to not count drivers and other providers as employees. Wednesday’s action by the Biden administration removes an extra layer of assurance gig-economy companies had.

“We are going back to the decade’s old analysis and we really feel that this is the space where we can best protect workers,” Jessica Looman, a principal deputy administrator for the Labor Department, said on a call with reporters, the WSJ reported. “When it comes to digital workers ... we want to make sure that we continue to look at their needs, how they are interacting with their individual employers and whether or not they have the protections of the Fair Labor Standards Act.”

Basware adds diversity data to supplier management metrics

Basware, a procure-to-pay (P2P) and financial management firm, added diversity data to its Supplier Management solution. It will help customers identify minority-owned and small business suppliers within their base.

In a press release announcing the addition, Basware said diversity is not just a value and ethical expectation but also an economic driver for businesses. The diversity indicators for the Basware Supplier Management platform can enable customers to determine minority-owned and small busines supplier status automatically within their network. The data is provided in partnership with Dun & Bradstreet’s Diversity Database.

“By having access to our diversity data in the Basware solution, customers can trust that they have the most complete database in the market at their fingertips,” Lauri Mähönen, Sales Director in Finland for Dun & Bradstreet Europe, said in the press release. “We are pleased to be a part of helping companies turn diversity data into strategic opportunities.”

White House likely won’t invoke Defense Production Act for semiconductor shortage

Critical industries may suffer if the US government invokes the Defense Production Act to redirect computer chips to the auto industry, a senior Biden administration official told Reuters.

As automakers have had to slow or pause production with the global semiconductor shortage, some have spoken to the White House about using the 1950 law that allows the government to force companies to produce materials for national security reasons. But some auto industry officials said they don’t think invoking the act is feasible or likely.

Reallocating semiconductors to automakers “would result in fewer chips for others,” the senior official told Reuters. It could also hurt makers of consumer electronics like laptops and medical devices like pacemakers.

"This is the worst nightmare if you're a supply chain manager," another person familiar with the White House's thinking told Reuters. "As a nation, it's terrible." No final decisions have been made.

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