Worker Protections in the Gig Economy
June 9, 2020
Freedom Comes At A Cost – And Workers Are The Ones Paying It
By Autumn Brehon
Law Students on Workers’ Rights Series
The Law Students on Workers’ Rights series publishes essays from current and incoming students at some of the top law schools in the country. These essays, submitted for the Charles E. Joseph Employment Law Scholarship, address the question “What are the biggest challenges facing workers’ rights in the future?”
Though the gig economy has existed in various forms in various eras under various names, Americans generally understand this emerging economic structure as novel and empowering. The traditional gig economy is characterized by short term contracts and freelance work over permanent work. However, corporation like banking and financial institutions and app-based platforms like Uber and TaskRabbit have increasingly relied on contract and freelance work.
Suddenly, employees have autonomy over their working hours as well as how many companies they serve. In many instances, workers also have autonomy over where and how they complete tasks—decisions that feel diametrically opposed to the standard corporate model where the employers set working hours and location with little autonomy for their employees. Consequently, this economic structure is altering the relationship employers have with Employees, a welcome alteration considering that according to Gallup’s State of theAmerican Workplace Report, only 33% of Americans report feeling engaged at work.
Still, while the interactions between employees and employers is a welcome change, workplace rights for gig workers are lagging behind.
These freedoms have come at a cost: this economic structure detrimentally impacts U.S financial systems and actually harms the independent workers. The lack of working protections in the gig economy is the greatest threat to workers’ rights.
According to the McKinsey Global Institute, 162 million workers in the US and the EU-15 participate in the gig economy. 16% of these workers are “financially strapped” and do supplemental work out of necessity; another 14% are reluctant earners who, “make their primary living” from this type of work, “but would prefer traditional jobs.”
Importantly, this structure was never intended to replace full-time hourly or salary work, and yet it is. Corporations, who retain the greater share of profits from the labor produced by their independent workers, are not required to provide employee benefits such as overtime pay or healthcare and prescription coverage.
This lack of job protection and benefits takes a toll on the economy at the local and federal level. When companies neither provide benefits nor compensate employees fairly enough to secure these benefits, workers rely on programs like Medicare, Medicaid, and food stamps. Worse, some employees simply go without. Either way, in the long term, these actions dry up state and federal coffers, while corporations actually save money by not providing these benefits.
Now, as bleak as the protections for gig workers appears, many of these practices could be adjudicated by federal regulations. The lack of protections for gig workers is compounded by the documented fact that federal lawmakers have not created regulations to ensure gig-worker protections in any substantive way.
Instead, under the current administration, the number of OSHA inspectors has dropped to the lowest numbers in the agency’s history. This decrease limits the federal government’s ability to enforce existing worker-protection laws.
Unfortunately, the neglect of contractors extends to other branches of government. The National Labor Relations Board decided in 2019 that it does not have jurisdiction over labor complaints from gig workers. The decision leaves these workers facing working conditions similar to those before 20th century reform movements.
Unions, a previous staple of American worker’s rights, are also losing power. Under this current administration, the Supreme Court’s ruling in Janus v. AFSCME overruled the court’s 1977 decision in Abood v. Detroit Board of Education. This ruling, which Donald Trump celebrated on Twitter as a “Big loss for the coffers of the Democrats,” means that public sector unions could lose millions of dollars. This loss will inevitability diminish the effectiveness of unions.
According to economist Alan Krueger and Lawrence Katz, 94 percent of net jobs created from 2005 to 2015 were impermanent – freelance, contractor, on-call, and temp agency – jobs. In the future, the majority of the workforce will be freelance. Even at this rate of growth, few states or federal lawmakers are enacting the type of laws and regulations that will protect gig workers.
In short, the gig economy is growing, but the rights gig workers receive is not expanding, and many worker protections are being diminished. In fact, enforcement of their rights appears to be swiftly diminishing.
Ultimately, lawmakers need to come to terms with the reality that while gig work has tremendous benefits, worker protections are not one of them. Lawmakers at the state and federal level should not wait for corporations to determine if and how to provide workers with protections and benefits.
Reflections from Charles Joseph
The gig economy continues to grow, but workplace protections for contract workers lag far behind the rights of employees. Currently, the majority of employment laws, including workplace discrimination laws and sexual harassment laws, do not apply to gig workers, as Autumn Brehon argues.
In 2019, New York State expanded its employment laws to include independent contractors, domestic workers, consultants, subcontractors, and vendors. New York City’s Freelance Isn’t Free Act also provides the strongest payment protections for freelancers in the country. Yet, as Brehon reminds us, the lack of action on a federal level means a piecework system that simply falls short of the needed protections. And, unfortunately, gig workers are the ones left paying the price.
Autumn Brehon graduated from the University of North Carolina at Greensboro and taught as an AP English Literature & Composition Teacher for several years before pursuing a career in law. Brehon will attend the Texas Southern University Thurgood Marshall School of Law in fall 2020 and plans to pursue immigration law.
Charles Joseph has over two decades of experience as an NYC employment lawyer. He is the founder of Working Now and Then and the founding partner of Joseph and Kirschenbaum, a firm that has recovered over $140 million for clients.