The Ugly Underbelly of the Gig Economy – Its Issues with Legislation | DCR Workforce Blog

The Ugly Underbelly of the Gig Economy – Its Issues with Legislation

Until the Department of Labor releases its reckoning of the gig economy in 2017, we may not have a truly official figure to confirm estimates that put the share of the gig workers in the workforce at 40%. It’s truly innovative structure has made it possible for people to embrace unforeseen opportunities to monetize assets like spare rooms and skills such as driving, writing, crafts, cooking and cleaning, to name a few; typically finding the work on different platforms and sometimes, executing it remotely, over the net. In fact, almost all the growth in employment between the years 1995-2015 is estimated, by a Harvard Research report, to have happened in alternative work arrangements.

The gig economy is marked by new and innovative approaches to work and this is probably also why much of the gig economy is facing lawsuits which question the way its work relationships are structured. Their very innovative structure weakens the safety net offered by the carefully formulated labor laws of the country to workers. Legislation is found to prove ineffective in many cases, giving rise to lawsuits, which take run their own course before getting decided. What do the rest of us do in the meantime?!

Legislation as it stands

Labor legislation today establishes the standards by which employers can engage, remunerate and treat their workers. It champions the interests of the workers and usually adopts the posture that employers wield too much control and power over their workers and tries to curb it as much as possible. Worker classification, whether as a W-2 employee or a 1099 independent contractor, depends on the workplace relation between employer and employee – and also on the way work actually gets done. The rigid definitions are many times inadequate to comprehend and classify the broad spectrum straddled by workplace relations, in the gig economy.

Today, we find a conscious campaign that calls for legislation which protects the flexibility of gig work without hurting the protections afforded to workers by the employment laws…most of which are currently limited only to the protection and benefit of permanent employees.

Significant among them are:

  1. Offer benefits to independent workers which are not tied to a certain workplace
  2. Create special marketplaces to provide independent workers with access to retirement packages, unemployment insurance, health insurance, disability/liability insurance and other benefits normally enjoyed by permanent workers alone
  3. The freedom to organize and collectively bargain and to have civil rights protections
  4. To receive employer contributions towards payroll taxes
  5. Unemployment insurance
  6. Workers’ compensation or minimum wage

Even as the developed countries of the world, including the United States, are keenly exploring the concept of a guaranteed basic income to all citizens, gig workers are struggling with almost no protection against contract violations resulting in wage theft, broken promises of work/payment, sickness, workplace injuries and other contingencies thanks to their lack of access to worker rights. These issues basically leave them economically insecure with no job security whatsoever.

All these issues could, of course, be rectified through policy intervention. Watch this space, as we report on the proposed labor laws that promise to better the lot of a growing number of American workers who depend upon the gig economy to provide them with a livelihood.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.