A profound reality of the contemporary economic world is the prevalence of gig workers. Anyone who has taken a rideshare to the airport, ordered food delivered in to their home, or taken a class taught by an adjunct professor, has encountered the gig economy head on. I most frequently encounter them on those occasions when I take a Lyft, which is my preferred way to get to and from the airport if I’m carrying luggage. Quite a lot of the time, I’ve found in conversation that driving for Lyft and Uber are the only employment that these drivers have. That, in turn, makes me understand why there is so much litigation and political activity concerning the compensation and economic conditions under which these people work.
While it’s true that many industries employ workers characterized as “freelancers,” for almost all purposes, the law still approaches the issue according to a model derived more than a century ago: someone is either an employee or an independent contractor. Employees have certain rights and certain limitations on their actions; independent contractors have fewer rights but greater freedom about performing their task. Compensation rules for employees are significantly different from the rules for independent contractors.
An employment relationship is the presumption. The burden is on the principal, not the worker, to prove that the relationship with the worker is not employment – and the only other thing the other person can be is an independent contractor. Getting the distinction wrong can result in severe consequences and large money judgments.
Complicating this, different kinds of government entities use different tests. The IRS uses one kind of test. BOLI uses another. The Oregon common law uses two different tests simultaneously. While all of these tests are similar to one another, they are also, unfortunately, not written in a way that is susceptible of precise mathematical precision.
The political trend appears to be moving in the direction of making it more difficult to shift away from the presumption of employment. The eyes of the nation are particularly on California even now to see how its new classification law (AB 5) will affect gig workers, freelancers, and other kinds of non-traditional agency relationships. AB 5 appears to shift the balance of the presumption for people like rideshare drivers significantly towards the employment regime. Many states or going to make political decisions over the course of the early 2020’s, responding to California’s experience and their own economic and political pressures.
I’m developing an idea about a different way the law might approach workers who take these sorts of gigs, particularly rideshare drivers but also meal delivery workers and others. Specifically, I’m considering someone whose work comes to them through a centralized brokering service which handles the money and the fees for the service. There are legitimate political concerns about their bargaining power and ability to make a realistic living doing this work. At the same time, it’s my understanding there are aspects of the independent contractor relationship that make the arrangement advantageous to both worker and broker. For the broker, it’s entirely possible that making all of these workers their employees would render their business model untenable and the service could end entirely. For the workers, the time flexibility and the right to decline particular jobs they might feel unsafe about doing are facets of the relationship worth preserving.
How best to preserve the good things about that kind of relationship while accommodating the economic and political concerns that motivate laws like AB 5? I have an idea that I’ll explore in future posts here. I’d be very interested in hearing from people who do gig work about their stories – what do they like or not like about this model of work, and do they welcome laws like AB 5?