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.
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.
The 9th Circuit Court of Appeals heard argument today over a proposal that would permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form unions. Given what could be at stake—the potential for the first-ever gig worker union—this has been a hard-fought legal battle to date, and today’s argument has been no different in nature.
Last week was a big week when it comes to shining the spotlight on sexual harassment in the gig economy arena. On Thursday, Nathan Heller wrote a piece for the New Yorker that garnered a lot of attention entitled, “The Gig Economy Is Especially Susceptible to Sexual Harassment.” The premise of the article is that freelance workers of all stripes outside the sphere of protection that typically covers W-2 employees, noting that human resources departments, collective bargaining, and federal and state laws cannot offer coverage over most independent contractors. Because of that, Heller writes, “freelance workers are highly vulnerable [to sexual harassment]. They have little institutional support and few, if any, supervisors. They are transient and easily replaceable as well. Those who gig with algorithmic ratings systems must stay on the good side of capricious clients. Others, who depend on word-of-mouth referrals, are obliged to embrace any gift horses that come.”
A state appellate court in Pennsylvania issued a ruling yesterday that should further aid the growth of the gig economy in the state, and if its reasoning is followed by courts in other states, could offer another helping hand to the nascent gig economy on a national scale. The court ruled that an unemployed man who picked up some shifts as an Uber driver did not disqualify himself from receiving unemployment benefits as a result of his gig work. This is good news for freelancers and businesses alike, as it removes one possible impediment that may have otherwise held people back from offering their services to gig economy companies.
Among my list of “must-read” workplace law summaries is the weekly “Punching In” column put out by Chris Opfer and Ben Penn over at Bloomberg Law’s Labor and Employment Blog every Monday morning. This week’s edition contains two pieces of interesting news for gig businesses. The first is a recap of the little-known provision in the tax reform bill that could provide as much as a 20 percent reduction off the taxable earnings of gig workers, which could funnel even more people into the pool of gig workers (and incentivize those already in the pool to stay there). We discussed this a few weeks ago; you can read about it in more detail here in this December 29 post.
The first few days of 2018 might not be going to plan for those gig economy businesses hoping that the new year might bring some relief in the seemingly never-ending misclassification struggle. As we sit on pins and needles waiting for a decision from the trial court judge in the blockbuster Grubhub trial (you can familiarize yourself with the trial here and here if you need a refresher), the plaintiff’s attorney is asking for a delay in the court’s ruling. Yesterday, plaintiff Raef Lawson’s attorney provided the court with a quick one-page filing that might otherwise seem innocuous; after all, it was just a “Notice of Supplemental Authority,” a common legal tool intended to alert the court to some additional legal precedent that might impact the case. But its contents could signal that a bombshell is on the way.
We recently ran an article about some major developments that will impact all employers as a result of the recently passed tax reform bill. But now you might be asking what specific changes might be in store for gig economy businesses. You’ve come to the right place, because we have the answer.