It seems like every day there is a new article slamming sharing economy platforms and marketplaces for their labor practices. Recent examples include:
- NPR's In Sharing Economy, Labor Laws Fall Short
- US New's The Not So Nice Sharing Economy
- SF Weekly's Codependent Contracting: Couriers Demand App Company Accountability
- Former Labor Secretary Robert Reich's How the New Flexible Economy is Making Workers Lives Hell
I could easily list many more negative press examples from the last few weeks.
The reason all of this is happening is our labor laws have not kept up with changes in technology or changes in the economy. Simply put, more and more workers don't fit existing labor classifications.
Key quote on this from the NPR article:
When it comes to the future of the growing “sharing economy,” things are far from clear. Two California juries are set to decide cases that could have wide-ranging implications on the industry that has grown up around Uber, Lyft, and other car-hire services.
Plaintiffs allege that the companies treat drivers as independent contractors even though they should be considered full employees, which would require Uber to provide sick days, health insurance and other benefits. Judge Vince Chhabria, who is presiding over the Lyft case, wrote that the jurors “will be handed a square peg and asked to choose between two round holes.”
Chhabria wrote that because he believes the labor laws, which employ legal tests to determine whether a worker is a contractor or an employee, are outdated.
It seems all of this will only calm down once our laws are updated. This will not be a quick or easy process.
But there is a rapidly growing view that there needs to be a 3rd labor classification for workers who fall between clear-cut employees and traditional independent contractors.
The term used to describe this 3rd class is dependent contractor.
The idea is to provide these workers some but not all of the protections of the traditional employee. Other countries, including Canada and Germany, already have labor laws covering this type of employment.
Driven by the controversy around employment in the sharing economy (especially Uber and Lyft), we expect similar laws to start to be enacted in the U.S. over the next 18 months.
Labor laws are not easily enacted, so this is a very aggressive forecast. But this issue is not going away and expect growing pressure on governments and public officials will force fast movement.
Yet another reason it's a great time to be a labor lawyer.
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