By Allen Smith
As the Gig Economy Changes Work, So Should Rules
In a new paper from the Hamilton Project, a liberal think-tank, Seth Harris, a Cornell University professor of industrial and labor relations, and Alan Krueger, a Princeton University economist, argue that employees like Uber drivers should not be classified as employees or independent contractors, but a new group of employees between the two: “independent workers.” They would enjoy more protections than independent contractors, but fewer than employees.
Seattle Votes to Allow Uber, Lyft Drivers to Unionize
However, Uber and Lyft drivers in Seattle are seeking more rights, not fewer. And Seattle’s city council gave them the green light to unionize, the first time a U.S. city has enacted a law approving unions of ride-hailing drivers.
A Proposal for Modernizing Labor Laws for Twenty-First Century Work: The ‘Independent Worker’
Nevertheless, Harris and Krueger posit that new and emerging work relationships arising in the “online gig economy” do not fit easily into the existing legal definitions of “employee” and “independent contractor” status. The distinction is important because employees qualify for a range of legally mandated benefits and protections that are not available to independent contractors, such as the right to organize and bargain collectively, workers’ compensation insurance coverage and overtime compensation. This paper proposes a new legal category, called “independent workers,” for those in the gray area between employees and independent contractors.
Rights on Demand: Ensuring Workplace Standards and Worker Security in the On-Demand Economy
But the National Employment Law Project (NELP) argues this approach is misguided and likely to serve business’ bottom line, not workers’ interests. NELP offers an alternative: coverage of on-demand workers in our existing core labor standards, as well as Social Security and workers’ compensation. NELP also asserts that new economic rights beginning to take hold, such as paid sick days and paid family leave, should cover workers in the on-demand economy.
Oregon Agency Says Uber Drivers Are Employees
Meanwhile, the legal battle over how to classify on-demand workers continues. In the Pacific Northwest, Oregon Bureau of Labor and Industries Commissioner Brad Avakian, in an advisory opinion, said Uber drivers are employees rather than independent contractors because they work for the company’s benefit and they’re economically dependent on the ride-hailing company.
Classification of Sharing Economy Workers as Contractors Challenged
The bottom line for some sharing economy workers is they want to enjoy their independent status, while seeking to be classified as employees rather than independent contractors, so that they are protected by a host of labor laws.
Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.