New guidelines for staff within the gig financial system

US labor law divides workers into “employees” who are entitled to the scope of certain laws, such as those relating to workers’ compensation, overtime pay, and the right to unionize, and “independent contractors” who are not covered by those laws.

But a large number of jobs in the so-called “gig economy” do not fall into either of the two categories. Someone who drives for Uber all the time, making their availability known through Uber’s computer system, following Uber’s pricing and service guidelines, and participating in Uber’s various rating systems, doesn’t seem like an “independent contractor”. “But since this employee can essentially determine his own working hours and is not supervised by a supervisor, it does not seem to be exactly like a normal employer-employee relationship

Rather than taking the round / square hole approach and trying to classify gig economy jobs as either “salaried employees” or “independent contractors”, it may make more sense to think about creating an additional legal category. Seth D. Harris and Alan B. Krueger offer some interesting thoughts on self-employment. They propose a third legal category which they call the “self-employed worker” to fall between the legal categories of employees and independent contractors. (Incidentally, it seems to me that there needs to be an alternative name for this group that more clearly distinguishes them from “independent contractors.” I like “gig workers” myself, but am open to suggestions.)

Harris and Krueger point out that the current legal standard for distinguishing between “employees” and “independent contractors” includes nine different distinctions – and those distinctions are made in the Fair Labor Standards Act, the Employee Retirement Income Security Act (ERISA), in the Tax law and in various court decisions on all of the above. The nine distinctions are:

“Role of work: is the work done an integral part of the employer’s business?

Skills involved: Doesn’t the job necessarily depend on specific skills?

Investment: Does the employer provide the necessary tools and / or equipment and does he bear the risk of loss from these investments?

Independent business assessment: Has the employee withdrawn from the competitive market to work for the employer?

Duration: Does the employee have a permanent or permanent employment relationship with the employer?

Control: sets the employer wage level, working hours and manner what work is being done?

Benefits: Is the employee receiving insurance, a retirement plan, sick leave or other benefits that indicate employment?

Payment method: Does the employee get a guaranteed wage or a guaranteed salary instead of a fee per task?

Intent: Do the parties believe that they have created an employer-employee relationship? “

It’s not difficult to imagine different work-and-pay relationships that overcome these differences in different ways. For example, in Canada there is a third category of “dependent contractors”, which are contractors who receive 80% of their income from a single company and therefore have access to some, but not all, standard worker redress.

Harris and Krueger define their proposed legal category of “self-employed” as follows:

“The self-employed work in a triangular relationship: They offer services to customers who have been identified with the help of intermediaries. The intermediaries create a communication channel, typically an “app”, through which customers identify themselves as in need of a service – for example car trips, landscaping or food deliveries (an intermediary does not have to use the internet to bring self-employed workers and customers together …). The intermediary does not assign the customer to the self-employed worker, but the independent worker chooses or refuses to serve the customer (sometimes within well-defined limits). However, the intermediary may set certain thresholds for independent workers who are allowed to use his app, e.g. price cap) for the service provided by independent workers through his app. However, the agent has no further control over how and whether or not a particular independent worker serves a particular customer. The agent is usually rewarded for his services at a predetermined percentage of the fee paid by the client to the independent employee. … The self-employed decides when and whether to work at all. The relationship can be fleeting, occasional, or constant, at the discretion of the independent worker. “

They estimate that about 600,000 “self-employed” workers, or 0.4% of US employment, work with online recruiters. in the gig economy. That number seems to be growing rapidly. They also mention a number of existing jobs that don’t work through online apps, but seem to share many of the characteristics of “self-employed” workers, and discuss how many traditional taxi drivers (as opposed to Uber and Lyft drivers) are temporary workers , Temporary workers, members who secure jobs through union halls, field workers and (perhaps) direct sales workers occupy the triangle points with other economic actors.

Here is a brief summary (with further discussion in the paper) of the Harris-Krueger proposal on how “self-employed” would be legally treated:

In our proposal, independent workers, whether they work through an online or offline intermediary, are entitled to many, if not all, of the benefits and safeguards workers receive, including the freedom to organize and bargain collectively, Civil rights protection, tax withholding and employer contributions for wage taxes. However, since it is conceptually impossible to assign their working time to a single agent, self-employed workers would not be entitled to hourly benefits, including overtime or minimum wage requirements. Since the self-employed are rarely, if at all, entitled to unemployment insurance benefits as they are free to choose whether to work through an intermediary, they would not be covered by the program or would have to pay taxes to fund this program. However, intermediaries would be allowed to pool self-employed workers to purchase and provide insurance and other services at lower cost and higher quality without the risk of their relationship being converted into employment.

Like any compromise solution, a new category of rights such as the Harris-Krueger proposal for “self-employed workers” will be somewhat unpopular with many parties. Many companies would prefer to treat their gig workers as independent contractors for which they have no additional legal responsibility. Some gig workers would prefer to have both their existing freedom of action and the statutory protection of workers. To solve these problems, we can either take the full employment lawyer approach and litigate the problems over and over in each new context in which they arise – an approach that is already underway – or we can agree on a solution Compromise position. I have no clear opinion as to whether the Harris-Krueger proposal for the legal status of “independent workers” is the right compromise. But it’s almost certainly better to stifle the gig economy with bureaucracy and legal briefs.