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.
As reported on our Wage & Hour Law Blog just a few days ago, the U.S. Department of Labor (DOL) has announced that it will revive its historical practice of issuing Opinion Letters in response to specific inquiries from businesses and workers about the application of (among other things) the Fair Labor Standards Act of 1938 to their real-world issues. This development is welcome – and extremely important – to the businesses fueling the growth of the gig economy, businesses that may feel understandable uncertainty about how the 80 year-old FLSA will be applied to the emerging business models that were not contemplated when the statute was first drafted.
Earlier this week, the U.S. Department of Labor dropped a bit of a bombshell when it announced the immediate withdrawal of two informal guidance letters issued back when President Obama governed the executive branch. The 2015 guidance on independent contractor (IC) misclassification and the 2016 guidance on joint employment were wiped from the books; if you search for them now on the agency’s website, you’ll find a blank page reading: “Page Not Found – The page you requested wasn’t found on our website.” What should gig economy companies take from this development, especially the withdrawal of the IC guidance? Yesterday I spent some time talking to a BNA reporter about this issue, and put some talking points together to sum up my take.