Editor’s Note: Terri Gerstein is director of the State and Local Enforcement Project at the Harvard Labor and Worklife Program, and a senior fellow at the Economic Policy Institute. The opinions expressed in this commentary are her own.
The hardware store down the street has to pay minimum wage, the dry cleaner pays unemployment taxes and the diner buys workers’ compensation insurance. Mom-and-pop businesses have managed to make a living while following basic workplace laws for decades. Yet the creative disrupters in Silicon Valley who run Uber, Postmates and other “gig” companies say they can’t make a go of it following the same rules as everyone else.
Instead, gig companies are urging Congress and state lawmakers to create a new category of worker, without the full protections that employees receive. But like all other businesses, gig companies should be required to treat their workers as employees, not as independent contractors or any other designation.
The poor conditions of those working for platform-based or “gig” companies have been well documented: Uber and Lyft drivers have been found to make paltry wages after expenses; DoorDash delivery workers have struggled to get their tips. None have the power to set their rate of pay or most any other term of employment. They’ve been designated as essential and exposed to risk during the pandemic; meanwhile, current high unemployment rates will make it even riskier for gig workers to speak up about safety or other workplace concerns.
In this depressing context, the CEOs of Uber and Postmates are advocating for the need to break out of what they see as the crusty old categories of employee and independent contractor. They say these categories no longer meet the reality of today’s workforce. These companies may be visionary geniuses regarding tech issues, and they’re great on customer service, but when it comes to what workers need, they’re simply wrong.
Gig companies have promoted proposals for a third category of worker; their plans include only the most meager of obligations. Uber, for example, urges that these companies should be bound only by three slender requirements: to not discriminate, to pay into a modest worker benefits fund and to provide insurance for on-the-job injuries.
But legally, being an “employee” means that workers have a broader bundle of rights that their employer must respect. What would gig companies jettison, based on Uber’s proposal? The right to a safe workplace, to minimum wage and overtime pay, to unemployment insurance and employer Social Security contributions and also to form a union and to not face retaliation for asserting any of these rights.
These protections are more relevant than ever today’s working people. Our laws respond to basic human needs that endure regardless of technological change. Why would we change everything about protections we’ve had for nearly a century because some companies — which currently employ around 1% of the workforce — happen to supervise their workers via smartphone? After all, the main difference between Uber and a traditional car service, or Doordash and a traditional pizza delivery outfit, is that customers procure services through an app on their phones instead of making a phone call. But working through an app doesn’t make the work different: The job is still driving people and delivering food, and workers are still performing the work for a more powerful public-facing business that calls the shots.
And what happens when there are future technological changes? What if construction companies start hiring workers via app? Would their workers also be exempt from workers’ compensation, or whatever other laws these companies deem outdated? This isn’t a farfetched question: Already the Massachusetts Attorney General has had to crack down on a company that treated dental hygienists hired through apps as independent contractors. Drivers drive, construction workers build and hygienists clean our teeth. The “gig” economy isn’t so innovative that it requires rewriting the laws that protect everyone.
Gig companies inaccurately assert, as Uber’s CEO did, that our current system “forces every worker to choose between being an employee with more benefits but less flexibility, or an independent contractor with more flexibility but almost no safety net.” This is simply false. No law prohibits part-time jobs or flexibility for employees. In fact, over 23 million wage and salary workers were employed part time in 2019 — treated as employees, with the wage, workplace safety and other key protections of employees, despite their part-time status. And plenty of employees don’t have rigid work schedules. This is especially evident during the pandemic: Many people have been working from home, getting their jobs done in flexible chunks of time, including after kids are asleep. They’re still employees.
Tech companies argue for separating our social safety net from employment, and most of us who care about workers would agree: We need far more robust protections for everyone, including universal health care unrelated to employment. But the answer isn’t eliminating the workplace protections we already have. In essence, gig companies want to redistribute the costs of the safety net away from themselves and toward workers and all of us. Indeed, right now, regular employee unemployment insurance benefits are paid for by employer taxes. Meanwhile, the temporary Pandemic Unemployment Assistance that many gig workers are receiving is federally funded — paid by all of us collectively because Uber, Lyft and their peers passed the buck. Why should that be the case?
Policy decisions should not be made on the basis of a few large companies’ self-interest. Rather, we should act based on what’s best for society, which includes ensuring decent, dignified treatment for the people whose work makes our country run. That necessarily involves placing some obligations on companies.
This is why the hardware store has to pay minimum wage, why the dry cleaner pays unemployment taxes and why the diner buys workers’ compensation insurance. It’s also why Uber and other gig economy companies should not be exempted from doing the same.