According to Merriam-Webster’s online dictionary, a gig worker is “a person who works temporary jobs typically in the service sector as an independent contractor or freelancer.” However, Indeed.com describes this same gig worker as “a professional who, instead of receiving a regular income, receives wages based on the one-time projects, or ‘gigs,’ that they complete.”
Click over to Wikipedia and you will find yet another definition. Wikipedia states that gig workers are “independent contractors, online platform workers, contract firm workers, on-call workers, and temporary workers who enter into formal agreements with on-demand companies to provide services to the company’s clients.”
It’s important to note that none of these definitions are the same. This is also part of the problem. Since no one can clearly define a gig worker, these workers get labeled as independent contractors to freelancers to temporary workers working on “one-time” projects. Once you understand that the definition of a gig worker is murky because no one can clearly articulate what they do, now you can start to identify the problem.
When Larry Williams Jr, a millennial labor leader and a former co-founder of the Progressive Worker Union, guested on the podcast, we talked about the plight of the gig worker. This is what Larry had to say about the gig worker on Amazon and the Future of the Gig Economy:
A Political Push and Pull
This lack of a clear definition for gig workers has created a political push and pull nightmare. In September 2019, California lawmakers passed AB5. AB5 codified Dynamex, a California Supreme Court decision that created a strict three-prong litmus test for employers to classify their workers as independent contractors.
This three-prong litmus test became known as the “ABC test.” First, a worker must be free from control and direction of the company. The second prong requires that a worker perform said work outside of the usual business. In other words, if my former Pure Barre studio, a group fitness studio, hired a plumber to fix my pipes, then that plumber would meet the definition of an independent contractor because his plumbing services are unrelated to my company’s group fitness services. However, my Pure Barre teachers cannot be independent contractors since they deliver the services that my company provides.
The last prong asks that a worker be regularly engaged in a trade, occupation, or business they are hired to do, but it must remain independent of the work for the company. This test is designed to identify those individuals who decided to go into business for themselves. This prevents companies from labeling any employee as an independent contractor. In the case of my Pure Barre studio, my group fitness instructors could not be independent contractors since I set their schedules and I had fixed class times that needed coverage.
In November 2020, Uber, Lyft, Doordash, and Instacart joined together and spent $200 million to pass Proposition 22. Prop 22 granted a specific exception for these companies to AB5, so their employees would not have to comply with the ABC test.
Meanwhile, the legal push and pull continues. In January 2021, the Service Employees International Union filed a lawsuit against Prop 22. Their lawsuit claims that Prop 22 violates California’s constitution since these workers do not have access to the state’s workers compensation program.
The PRO-Act and Beyond
Under the PRO-Act, the federal government and the Biden administration appear poised to tackle the definition of the gig worker. If passed, Protecting the Right to Organize Act or the PRO-Act, would adopt California’s AB5 strict definition of independent contractors. Tech companies like Uber fear that the PRO-Act will lead to reclassifying gig workers as employees.
Besides, California’s AB5 and the PRO-Act, Uber has already seen other countries begin chipping away at its classification of gig workers as independent contractors. On February 19, 2021, the UK Supreme Court unanimously agreed with a 2016 employment tribunal decision that maintained Uber drivers were in a position of “subordination and dependency to Uber;” therefore, they were not independent contractors.
Although, the decision stopped short of labeling these Uber drivers as “employees,” it did determine that they were “workers” who performed at Uber’s mercy. The UK Supreme Court cited how Uber sets maximum fares and that drivers have “no say in their contracts.” Drivers are also subjected to penalties if they canceled too often. Unlike real independent contractors who measure their own performance and can set their own hours, Uber drivers can only increase their earnings by working through Uber’s app and by meeting the company’s measures of performance. This means that drivers do not work for themselves, but they work for Uber, which makes them employees.
Uber was dismissive of the verdict and claimed that it only applied to the 25 Uber drivers who filed the claim. However, the decision sets a legal precedent for millions of gig workers throughout the United Kingdom. It also serves as a landmark for other jurisdictions who may be undecided about how to classify their gig workers.
The handwriting is on the wall. Uber and the rest of these tech companies should move to reclassify their workers as employees before the government or the courts do it for them.
The Guardian: Uber’s UK Supreme Court Defeat Should Mean Big Changes to the Gig Economy; John Naughton, Feb. 27, 2021
Labor Days Blog: California Court Says Uber and Lyft Drivers are Employees, Not Contractors; Mark A. Konkel & Nicholas J. Kromka, August 18, 2020
Chicago Tribune: Uber, Lyft Prices on Rise as More People Return to Pre-Pandemic Life; Kate Conger (New York Times), May 30, 2021
Los Angeles Times: Uber Reneges on the ‘Flexibility’ It Gave Drivers to Win Their Support for Proposition 22; Michael Hiltzik, May 28, 2021
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