If you are a Millennial female with Facebook, I’ll make an educated guess that you have at least been invited to join a LuLaRoe group. Or perhaps you have recently attended (or hosted) a Stella and Dot party. Companies such as these have consultants who engage in “social selling.” For those unfamiliar with this trend, think of Tupperware parties of the past now in Facebook form where consultants can sell their leggings, jewelry, makeup, etc., from the comfort of their living room directly to their family, friends, and extended network.
The evidentiary phase of the Grubhub misclassification trial ended last week; now the gig economy world waits with baited breath for a final ruling. For those unfamiliar with the situation, this could be the first time the common classification system in the gig economy is on trial. A former delivery driver, Raef Lawson, alleges he was actually an employee and should be compensated for unreimbursed expenses, while the company adamantly argues that he was correctly classified as an independent contractor. Although less than $600 in damages is on the line, the very nature of the gig classification system could be at stake, as a negative ruling could open the floodgates for untold numbers of gig workers across the country to claim they are actually employees.
With the rise of “Uber-ization” of the workforce in the gig economy, many companies, including Fortune 500 firms and IT companies, are adopting a freelance model for its workforce. It’s understandable why businesses would be drawn to it: it provides them a more flexible and low-cost-way of hiring and retaining workers, especially those with specialized skills.
When most hear the phrase “gig economy,” they immediately think about giants like Lyft and Uber. Personally, I use Lyft and Uber often while traveling and enjoy talking to drivers about why they choose to work in the gig economy, how long they have done so, and whether they enjoy their jobs. Most enjoy their gigs, and have been doing them for less than a year. Many of the drivers also have full-time jobs, but prefer the flexibility of making extra money during their down time.
A federal judge in California recently gave his blessing to an $8.75 million settlement in the ongoing litigation by delivery drivers against the food courier service, Postmates. In the class action suit, which was filed in March 2015, delivery drivers claimed that they were misclassified as independent contractors and were paid less than minimum wage. They contended that by labeling them independent contractors instead of employees, Postmates violated California labor statutes, the federal Fair Labor Standards Act (FLSA), and the California Private Attorneys General Act (PAGA). The plaintiffs asked the court to grant them nationwide class status, which ratcheted up the stakes significantly.
When it comes to passing new laws designed to protect workers, San Francisco is one of the busiest municipalities in the country. In recent years, the City has passed ordinances addressing paid sick leave, lactation in the workplace, consideration of applicant salary history, flexible workplace schedules, and predictable workplace schedules. San Francisco will require employers to pay a $15 minimum wage beginning in 2018, and recently became the first city in the nation to require paid parental leave for employees.
As readers of this blog know, we are right in the midst of one of the most significant legal developments for the gig economy. For the first time, a judge is being asked to definitely decide at trial whether a typical on-demand worker is correctly classified as an independent contractor or whether he is actually an employee. The two-week trial started last week, the Tuesday after Labor Day, and apparently there have been some interesting developments in the proceedings so far.
How important is your businesses’ terms of service (TOS) agreement, usually presented to users of your business model through a process requiring them to click “I agree” before they can access your platform?
Josh Eidelson from Bloomberg reported that the National Labor Relations Board (NLRB) issued a complaint against gig economy mainstay Handy earlier this week, alleging that the on-demand workers who provide home cleaning services through its online platform are actually employees and not independent contractors. The complaint was issued on August 28 out of the NLRB’s Boston office; a copy has not yet been made public, but if Eidelson’s report is accurate (and there is no reason to think it isn’t), this is a troubling sign for gig businesses.