Imagine one of your worst corporate nightmares comes true: a government body has determined that you have misclassified your workers, and they should be considered employees and not contractors. The ramifications could be devastating for your organization. You could be on the hook for overtime or minimum wage payments in the tens (or hundreds) of thousands of dollars, you may have unemployment insurance consequences to face, you may have an obligation to provide a cache of benefits to your workers, and perhaps even workers’ compensation insurance issues could arise. Your very business model may be threatened. But if certain administrative law judges had anything to say about it, your trouble could be just beginning: you could also be facing an automatic unfair labor practice (ULP) charge on top of your other worries.
The Aspen Institute’s Future of Work Initiative has partnered with Cornell University’s School of Industrial and Labor Relations (ILR) to introduce the “Gig Economy Data Hub.” Set to launch this spring, the database aims to serve as a comprehensive source of the knowns and unknowns of the gig economy.
Offering health, retirement, and workers’ compensation benefits to the varied gig workforce, while maintaining some affordability to the worker while also avoiding the 30 percent cost increase to businesses, has proven to be an extremely tall task. The situation gets even more complicated because gig businesses also need to be concerned that charges of worker misclassification could be supported by the offering of such benefits to their contractor workforce.
Bill Gates once said “Information Technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the other.” The advent of the gig economy along with the integration of technology has changed the traditional job market. Employers may view technology as an obstacle, but it is crucial they get on board given the increased mobility of today’s workforce. They have no choice but to incorporate the latest technologies to stay competitive. Recently, the Chief Executive Officer of Shiftgig, Wade Burgess, wrote an article for Forbes.com discussing the three ways technology is changing the gig economy in 2018.
Just hours after the Eagles clinched their upset Super Bowl win over the Patriots, a different battle royale began in a San Francisco courtroom between an established juggernaut and its upstart rival. For techies and trade secret geeks, the Waymo v. Uber trial was shaping up to be the Super Bowl of trade secret litigation. The lead-up to the trial had more surprises than a Justin Timberlake halftime show (though fewer wardrobe malfunctions).
According to a report in today’s Washington Examiner, we may be on the verge of getting some hard data that would show just exactly how big the gig economy really is. Reporter Sean Higgins says that the Bureau of Labor Statistics will publish the latest edition of its Contingent Worker Survey this spring that will offer new data on workers doing short-term, non-salaried gigs. An anonymous source in the Labor Department said the study probably will be published in April, according to Higgins.
For many years, men have earned more than their similarly situated women counterparts. This statement is no surprise. In 2016, the National Bureau of Economic Research released a white paper suggesting that women earn only 89 cents for every dollar a man earns. This is nothing new in the traditional workplace model. However, is this statistic applicable to the gig economy?
By now, you’ve probably heard the good news: a federal judge yesterday ruled in favor of Grubhub and pronounced that a delivery driver who was challenging the independent contractor classification model was not, in fact, an employee. This appears to be the first time that a classification case in the gig economy reached a judicial merits determination, so it’s sort of a big deal. And while it only applies specifically in California, the decision rested upon a familiar test (centered around the company’s “right to control” its workers) that is commonly used in other jurisdictions across the country, and could be used by other courts looking to rule on similar cases.
In what is believed to be the first time in our nation’s history that a trial court has reached a judicial merits determination in a gig economy misclassification case, a federal judge in California ruled in favor of the company this afternoon and found that a delivery driver was properly classified as an independent contractor. By rejecting the driver’s claim that he was actually an employee deserving of minimum wage, overtime, and other benefits associated with employee status, the court handed gig economy companies everywhere a groundbreaking victory.
Early last month, we told you that a critical trial ruling in a gig economy misclassification case could be put on hold because a separate court was mulling whether to loosen the test to make it easier for workers to succeed in independent contractor misclassification cases. That other court—the California Supreme Court—heard oral arguments yesterday on that very topic, and every gig economy company should be on notice.