According to Bloomberg Law’s weekly “Punching In” column (an absolute must-read each week) that published today, some congressional leaders are not too pleased with the Labor Department after it published an opinion letter a few weeks ago confirming that certain workers for an unnamed gig economy company were properly classified as independent contractors. As we wrote about back on April 29 when the opinion letter was released, that letter offered up the federal government’s official interpretation on whether a certain business model or practice complies with the law, providing us with a solid understanding of how the current USDOL views the misclassification question and will approach it from an enforcement perspective. And the news was very good for gig businesses: “while not a magic bullet that will cure all that ails the modern gig economy industry, [the] development is a welcome one—and a preview as to how today’s USDOL will treat misclassification concerns that fall into their laps from gig economy (and other) businesses,” we said at the time.
In a major positive development for gig economy businesses, the U.S. Department of Labor today issued an opinion letter today confirming that certain workers providing workers for a virtual marketplace company are, indeed, independent contractors.
Last week was a bad week for gig economy companies in Oregon. It wasn’t just the post-holiday malaise that so many suffer from after having to return to work following a long, relaxing weekend that probably included eating too much turkey.
Bloomberg Law’s Jaclyn Diaz wrote a very interesting story earlier this week asking whether the U.S. Department of Labor (USDOL) would soon issue an opinion letter to aid gig economy companies with commonplace labor and employment issues—namely, the ever-present threat of misclassification. Unfortunately, the story seems to indicate that such a letter is not on the horizon anytime soon, but it does describe the current atmosphere as one that could soon support such an opinion.
We’ve been waiting for something like this since the gig economy was established: a set of rules and regulations, adapted for the modern era and with the gig economy in mind, addressing the issue of independent contractor classification. And yesterday’s news may mean we may actually have our wish granted.
Although the document itself is fairly dense and complex, specifically focusing on the home-care registry industry, the Labor Department’s latest field assistance bulletin could provide a helpful clue to gig economy companies about how the agency could regulate the concept of misclassification on a broader scale. The July 13 document tilts the scales back towards an even playing field, which should be music to the ears of gig economy businesses across the country.
It’s a small step, but at least it’s progress. Federal regulators made it easier this week for gig workers to obtain health insurance on a more cost-effective basis, which should help to shore up the ranks of gig workers and make freelance work a more attractive option for a larger pool of talent.
How much has the gig economy changed in the last 13 years? We’re (finally) about to find out. According to Tyrone Richardson at Bloomberg Law, the United States Department of Labor’s Bureau of Labor Statistics (BLS) is scheduled to release a report on “contingent and alternative employment arrangements” on June 7, 2018. To put in context how much things have changed since the last time the BLS released such a report—February 2005—that was the same year Destiny’s Child split up and two years before the first iPhone was released. Many of these on-call workers and independent contractors are not included in the BLS’s monthly jobs report despite studies that suggest these types of “alternative” arrangements accounted for 94 percent of net employment growth in the U.S. economy over the last decade.
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.
U.S. Department of Labor Secretary Alexander Acosta made the news again this week due to his remarks on the ever-growing gig economy and the need for increased legislative attention on this topic. As we discussed in an earlier blog post from just a few weeks ago, Acosta is already on the record as saying that he believes the current administration should consider how to update existing laws to keep up with the rise of the gig economy and technology changes in general. His comments yesterday, repeating and amplifying his statement, demonstrate that his October 25 statement wasn’t just a passing remark.