A delivery driver for gig economy company DoorDash has been ordered by the 5th Circuit Court of Appeals to take his misclassification case to a private arbitrator instead of court pursuant to a valid arbitration agreement he entered into. The April 25 decision is a solid win for gig employers and could provide a template for how other similar businesses should structure their own arbitration agreements.
According to a recently released study by American Express and Institutional Investor, we can expect to see a slight increase in the use of freelancers and contract workers in the year ahead.
The gig economy continues to be a popular topic of discussion—for policymakers, politicians, lawyers, the media, and others. However, getting a good handle on the scope of the gig economy can be difficult at best. Traditional labor market data has not kept pace with new trends in the economy. As a result, getting good, hard demographic data can be challenging.
As an increasing number of workers continue to join the gig economy, it is increasingly imperative for lawmakers and regulators to create a new retirement system that allows for freelancers and individuals working for multiple businesses to easily save for retirement. Although the American workforce is changing, the traditional retirement system does not yet present an option for the changing workforce. Gig workers are currently not entitled to enjoy a traditional employer-based retirement plan because such plan are only permitted to cover employees and not independent contractors.
I wrote an article last week about a Pennsylvania federal court victory for Uber, repelling a misclassification attack from several drivers who claimed they should have been considered employees. You can read the full summary here.
The growth and benefits of the gig economy are well documented. By some accounts, more than 31 million individuals in the U.S. workforce derive their primary income from the gig economy, and businesses continue to provide platforms for this kind of work given the fact that it serves as easy access to a scalable source of labor, skills, and other professionals, not to mention the reduced start-up costs and the elimination of common hiring barriers. Up until now, however, you did not hear the gig economy mentioned in the same sentence as the government sector. It seemed to be confined to private sector employers only. However, it should not come as a surprise that the federal government wants to cash in on the benefits of hiring gig workers.
As we have previously discussed, one of the hottest gig economy issues to dominate political and public policy debate has been “portable” benefits – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job. States and local governments are increasingly moving forward on their own with proposals to explore the provision of benefits to individual performing work in the gig economy. Most notable are proposals that have been set forth in the state legislatures in Washington, New York and New Jersey. The movement also got a boost in January when Uber and SEIU announced a joint call for the state of Washington to develop a portable benefits system that would cover gig economy workers.