The gig economy is constantly evolving, becoming more deeply entrenched in certain areas of the economy while looking to expand into others. The COVID-19 pandemic accelerated this trend by forcing changes in the behavior of individuals and businesses that is certain to outlast the health crisis.
There’s an old saying that out of crisis comes opportunity – and the gig economy may be on the verge of living that adage. Thanks to the two trillion-dollar Coronavirus Aid, Relief, and Economic Security Act (CARES) Act signed into law last week, the entire industry may be forever altered because independent contractors will temporarily be able to recover unemployment benefits. The Pandemic Unemployment Assistance program expands coverage under the state-by-state unemployment compensation system to individuals “not eligible for regular compensation or extended benefits under state or federal law or pandemic emergency unemployment compensation,” which includes, but is not limited to, certain gig economy workers. Who is now eligible, and what will this mean for the gig economy?
A New Jersey lawmaker recently took a big step towards creating a system of benefits for gig economy workers. New Jersey State Senator Troy Singletary introduced Senate Bill 943 which, if enacted, would “establish a system for portable benefits for workers who provide services to consumers through contracting agents” in the state.
While U.S. lawmakers grapple with the dynamics of the gig economy, our neighbor to the north is witnessing a dramatic increase in the number of gig workers. A recent article in the Toronto Star discussed a new study from Statistics Canada which “found a dramatic increase in gig workers.” Specifically, the study found that the number of gig workers in Canada “jumped by 70% between 2005 and 2016, from 1 million to 1.7 million — an increase from 5.5% of all workers aged 15 and older to 8.2%.” In Toronto, one in 10 workers obtained some of their income from the gig economy in 2016 according to the study.
The Gig Economy has caught the attention of at least one presidential candidate who has unveiled a plan called “A New Rising Tide” which, among other things, calls for greater protections for gig economy workers.
Last week, the French Court of Appeals dealt another blow to global gig businesses, ruling that the agreement between Uber and a former driver was “an employment contract,” because the former driver was “dependent” on Uber “for work.” In so ruling, the court rejected the company’s long held position that it is “merely a service provider with drivers who are self-employed, able to work when and where they want.” The decision overturned a lower court ruling in favor of Uber.
The British government announced workplace reforms yesterday (which include new legislation) that will impact employers including gig economy companies, although the reforms do not seek a “radical reworking of existing business models.” The reforms set forth in the “Good Work Plan” are based on an independent review of modern working practices conducted by Matthew Taylor (“Taylor’s Review”), chief executive of the Royal Society of Arts. Taylor’s Review was commissioned by the Prime Minister, and the Reforms bring forward 51 of Taylor’s 53 recommendations.
Frequent readers of our blog will recall our post from earlier this year where we referenced the efforts of gig economy company Handy to lobby legislators in a number of states to pass laws protecting the independent contractor status of individuals working in the online digital marketplace. That effort was recently successful in Tennessee.