The gig economy is in the news again – this time with the US Department of Labor announcing new regulations concerning gig workers. The labor and employment laws governing gig work are developing rapidly and are confusing for workers, employers, and even some attorneys. We’ll update the latest legal developments and try to provide some structure to the seemingly endless and sometimes contradictory news stream.
A law professor of mine, whenever asked a question by a student, would inquire, “Why do you ask?” The purpose of this simple and repetitive question was to teach us to focus relentlessly on the facts that led to the question. In the case of gig workers, consultants, and independent contractors, in addition to the wise professor’s question, “Why do you ask (i.e., which area of law are you asking about),” we must add, “Where do you live and work?”
Overtime and Minimum Wage
Overtime and minimum wage rules are set by both federal and state law. The regulations the DOL announced last month primarily communicate how the DOL believes gig workers should be treated under the Fair Labor Standards Act (FSLA), which governs federal overtime and minimum wage rules. The bottom line is that the rules put some employer-friendly spin on the established law, however there is not much change. The key concepts are still the classification of the worker (employee or independent contractor), the level of control of the worker’s activity by the employer, and the opportunity for profit/loss by the worker. State laws vary widely and often offer more protection and clarity for workers.
Unemployment benefits are provided by state law. Traditionally, because it is employers who pay into state unemployment insurance programs, self-employed people and independent contractors have not been eligible for benefits. The COVID-19 pandemic and the explosion of the gig economy in general have changed the unemployment benefits landscape, perhaps forever. Here are some examples of the changes that may be coming.
- The CARES Act 2021 extends Federal unemployment benefits to gig workers through at least March 14, 2021.
- A recent ruling by the New York state appellate court decided that Uber drivers are employees for purposes of New York unemployment law.
- The Third Circuit Court of Appeals recently overturned a summary judgement in favor of Uber denying their Pennsylvania drivers unemployment benefits, requiring the trial court to take a complete look at the issue.
- The California courts have found that ride-sharing drivers are employees under a new state law, while a recent ballot initiative declared they should be classified as independent contractors. There will certainly be litigation and further developments, but for now, as always, keep an eye on California for signs of things to come.
Harassment and Discrimination
Gig workers, consultants, and independent contractors can be the victims of workplace discrimination and harassment. The legal standards are different, and the facts, as always, are important to any claim, however the statutes and common law provide many protections for workers who are not formally classified as “employees.” Sometimes the harassment and discrimination rises to the level of assault, which no one, employee, consultant, or gig worker, should be forced to endure.
When someone is injured or killed while working, they generally cannot sue their employer. Instead, the injured employee must make a claim under the state Workers’ Compensation Act, which requires employers to provide benefits to the injured worker. Gig workers, independent contractors, and consultants, however, are not barred from suing their “employer,” so this is one area where the injured gig worker has more options than a traditional employee.
Whistleblowing is the reporting of corporate or governmental wrongdoing by individuals who are “in the know.” Whistleblowers are often employees of the wrongdoer, but contractors, gig workers, drivers, competitors, and others may also have valuable information that can lead to a whistleblower action. The attorneys and paralegals at Pelton Graham are experienced and sensitive to all the issues a potential whistleblower faces.
At Pelton Graham we are ready to assist you, at no cost, in assessing your claim – you will meet with our professionals, in person or by teleconference, to discuss your case.
If you have experienced workplace unfairness, especially if it affects a number of workers in the same situation, you should act promptly to seek advice. This is important both in order to stop the unfair activity, and because worker protection laws have strict filing deadlines which could bar your claim. Pelton Graham is here to help.
Photo credit: Wide River Winery