Gig companies – at least some – are discovering the upside to hiring W-2 employees.
Wait, what? Well, as it turns out, for some companies that rely on repeat business, there appears to be a potential argument in favor of hiring W-2 employees instead of retaining independent contractors.
Long hours and late nights detrimentally impact one’s ability to drive safely. The longer a driver has been awake, or the greater the number of hours he or she has worked, the more likely an accident may occur. Some professional drivers, including operators of commercial tractor-trailers governed by the U.S. Department of Transportation, have traditionally been subject to hour restrictions. These regulations prohibit drivers from working more than a certain number of hours without proper rest.
Several weeks ago, we asked if the concept of portable benefits for gig economy workers was one step closer to reality, with rumors swirling of imminent federal legislation forthcoming. Well, this issue just took a big leap forward with the introduction of legislation by Senator Mark Warner (D-Virginia).
One year after Uber and Lyft terminated operations in Austin, Texas, the ride-sharing platforms may be ready to return. The issue stems from a City of Austin ordinance that requires all “transportation network companies” (TNCs) to conduct fingerprint-based criminal background checks on individual drivers. The ordinance passed in December 2015, and went into effect in May 2016. Immediately after the ordinance went into effect, Uber and Lyft announced they were terminating service in the Austin market, primarily because of concerns over the length of time required to complete the background checks (a difficult impediment for a business model reliant upon quick onboarding of new drivers). Lyft, at the time, commented that it “doesn’t operate our peer-to-peer service in any market where mandatory fingerprinting requirements exist.”
Today’s employment “Game of Life” looks very different than it used to. One of the biggest reasons: the gig economy is expanding at a rapid pace. Other factors include the fact that there are four generations competing for work and working together, while certain demographics, such as the number of single women in the workforce, are on the rise. Meanwhile, employees’ definitions of family and work/life balance are changing. Add all of these together and you have the perfect platform for the exploding sharing economy. Working in the gig “game” appeals to those interested in an alternative, more flexible, more relaxed lifestyle. According to the U.S. Bureau of Labor Statistics, gig workers like being in control, having flexibility, enjoy variety, and enjoy choosing work that they are passionate about. As a result of the growth of this area, employees’ workplace expectations are changing. So, too, should employers’ practices for utilizing and integrating such workers into their business model.
With the recent confirmation of Neil Gorsuch, the Supreme Court is now back up to its full complement of nine justices. While the current Court term has largely been devoid of blockbuster workplace law decisions – which could be the product of the sitting justices not wanting to resolve significant cases with only eight members – observers are already looking forward to what many believe will be a scintillating 2017-2018 term. The Court has already agreed to rule upon whether mandatory class action waivers are valid in an employment context, and we could also see action on sexual orientation discrimination claims and a re-visitation of the crucial agency shop fee conflict beginning in October 2017.
The replacement for the Affordable Care Act (ACA) – the American Health Care Act (AHCA) – recently passed the House and is now being considered by the Senate. It has the full support of the president, and barring any significant amendments, President Trump will no doubt sign it into law if it passes the Senate. Many independent workers, including those working in the gig economy, are worried because of a belief that a repeal of the ACA could have a huge impact on the way they work.
According to a great article by Tyrone Richardson in Bloomberg BNA, it appears that the concept of portable benefits for gig workers is a step closer to reality. Richardson reports that Congress is “seeking ways to fill the void of benefits offered to traditional employees,” especially given that sharing economy companies are often hesitant to offer any sort of benefits package to their workers for fear it will land them on the losing side of a misclassification battle. That has led Senator Mark Warner (D-Virginia) to craft a preliminary concept for a federal law that would assist local governments with funding and development of portable benefits for gig workers.
An influential member of Congress recently provided some hope that statutory relief for the ill-fitting wage-hour rules as applied to gig workers might be considered by Washington in the not-too-distant future.
A while back, we posted about corporate travel and the sharing economy, noting the burgeoning acceptance of ride-sharing expenses by corporate America. Despite ongoing criticism and litigation, the sharing economy continues to grow, and now it appears even the federal government embracing sharing.