Worker misclassification is one of the biggest issues facing businesses in the gig space and elsewhere. As the demand for gig workers increases, businesses are thinking of creative ways to hire and retain great talent. Independent contractors are increasingly becoming savvier, too, and are using their collective power to push employers for benefits traditionally reserved for W2 employees. So, what is a business to do? Well, one company is offering traditional benefits to untraditional gig workers.
Is there nowhere that the gig economy can’t go? As gig workers expand into increasingly unlikely industries—including restaurants, hospitality, beauty, healthcare, and even science—it comes as no surprise that retail wants in on the action. Would-be retail workers are gaining access to open shifts in storefronts through companies like Snag Work, which offers an on-demand platform that connects workers with open shifts for sales, stocker, cashier, customer service positions, and other roles. Although Snag Work is only in a few cities on the east coast so far, companies like it are already cropping up across the country.
Traditional employers are continuing to discover that they can benefit from the gig economy through the utilization of external platforms to hire contract workers. Sometimes companies are caught off-guard by a sudden uptick in demand or an employee resignation and suffer from the detailed and drawn out process of hiring a long-term employee. Employers are increasingly eliminating staffing lag time by relying upon gig platforms to efficiently hire and onboard workers for short-term needs during peak demand cycles.
Headlines from mainstream news outlets are reporting that today’s Labor Department report on Contingent and Alternative Employment Arrangements shows that the gig economy is shrinking. “The gig economy is actually smaller than it used to be,” says Marketwatch. From the Washington Post: “There’s a smaller share of workers in the gig economy today than before Uber existed.” From the Los Angeles Times: “Share of Americans working as independent contractors dips.” And most dramatically from Quartz Media: “Everything we thought we knew about the gig economy is wrong.”
The explosion of freelance work has changed the economy in a number of significant ways. After all, by some accounts, 43 percent of U.S. workers will have some involvement in the gig economy by as early as 2020. Of the major industries being impacted, the mortgage lending business seems ripe for drastic changes to longstanding lending guidelines.
Just last month, Uber announced that it would no longer require its passengers, drivers, or employees to arbitrate their individual claims of sexual assault and sexual harassment, allowing such claims to proceed in court. Uber’s Chief Legal Officer Tony West stated in a blog post: “We have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: In a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court.” Uber will also no longer require those who settle sexual assault or harassment claims to sign non-disclosure agreements. Hours after Uber’s announcement, Lyft announced that it, too, would waive mandatory arbitration and remove the confidentiality requirement for sexual assault and harassment victims.
When you last heard from me regarding the state of the gig economy, the discussion at the beginning of 2018 focused on the fact that small businesses were joining large corporations in embracing the on-demand model. Now, let’s shift focus from the “who” to the “where” and the “what.”
Online digital marketplaces such as Uber, Handy, and PostMates are now firmly rooted in many American’s daily lives. With the seemingly overwhelming and growing presence, these companies continue to face uncertainty when classifying their workers which may result in longstanding financial, legal, and social implications. The business models of online digital marketplaces rely on their workers being classified as independent contractors, not employees, which are significantly less expensive to hire than employees and are not subject to most labor protections.
Now that sports betting has been legalized by the Supreme Court, I might want to consider laying some action on an upcoming game, because I am on fire with my recent predictions. In a blog post from last week, I correctly predicted the two arguments that Grubhub would be making in response to the plaintiff’s argument that the trial victory should be wiped off the books and returned to the lower court for further proceedings. Late last night, the gig economy company filed a brief with the 9th Circuit Court of Appeals in an attempt to preserve its momentous trial victory.
How much has the gig economy changed in the last 13 years? We’re (finally) about to find out. According to Tyrone Richardson at Bloomberg Law, the United States Department of Labor’s Bureau of Labor Statistics (BLS) is scheduled to release a report on “contingent and alternative employment arrangements” on June 7, 2018. To put in context how much things have changed since the last time the BLS released such a report—February 2005—that was the same year Destiny’s Child split up and two years before the first iPhone was released. Many of these on-call workers and independent contractors are not included in the BLS’s monthly jobs report despite studies that suggest these types of “alternative” arrangements accounted for 94 percent of net employment growth in the U.S. economy over the last decade.