Should gig economy workers, such as Uber drivers and Taskrabbits, be entitled to the same rights and benefits as regular employees?
Currently they aren’t. And many of the online apps and platforms that offer the goods and services these workers provide would like to keep it that way. That frees these companies from having to offer benefits, pay a host of taxes and abide by certain labor laws.
Leading the charge is New York-based Handy, an online platform that connects users with home service providers ranging from plumbers to house cleaners. The company has put bills in front of eight state legislatures this year that would permanently classify most gig workers as independent contractors. All eight bills have passed at least the house or senate in each state and appear likely to be signed into law soon.
Defining gig workers as independent contractors will give platform companies the certainty that their business model will hold up to legal scrutiny, Handy argues.
Over the years, many platform companies — including Handy — have been sued for allegedly misclassifying workers as independent contractors. The legal outcomes have been mixed, with many cases settling before a verdict was reached, or awaiting a Supreme Court decision on whether the arbitration agreements most workers signed can be enforced.
The state laws would prevent such lawsuits in the future by wiping away many of the criteria that usually establish an employer-employee relationship. But labor advocates worry the laws will erode the benefits and protections to which workers should be entitled.
Currently, the distinction between a contractor and an employee hinges on the idea of control. Telling a worker when and how to perform a job, providing training or supplies, monitoring their activity and determining the rate of pay are all factors that would support a finding that the worker is an employee.
The laws Handy is trying to get passed by the states would enable employers to do many of those things without having to call the worker an employee. That frees them from having to pay workers’ compensation premiums and unemployment taxes or obeying state anti-discrimination and minimum wage laws. They’ll likely be off the hook for federal labor standards and Medicare and Social Security taxes as well, since federal enforcement is sparse.
“They’ll be able to set wage rates, they’ll be able to discipline workers, they’ll be able to fire workers, they’ll be able to monitor workers,” explains Rebecca Smith, deputy director of the National Employment Law Project, a nonprofit worker advocacy group. “Almost everything that makes you an employer under…