Adapting to the Gig Economy

By Zoe MacKeracher

The Law Students on Workers’ Rights series publishes essays from current and incoming students at some of the top law schools in the country. These essays, submitted for the Charles E. Joseph Employment Law Scholarship, address the question “What are the biggest challenges facing workers’ rights in the future?”

Historically, the struggle for workers’ rights has been long and arduous, marked by labour strikes, protests, and legislative reforms. In the face of technological advancements and changing labor practices, workers’ rights continue to evolve, requiring adaptation and innovation in labour laws and regulations. App-based work often provides low wages, dangerous conditions, precarious work, weak bargaining rights, and limited access to employment protections. These protections have only gotten weaker with the rise of the gig economy. One of the biggest challenges facing workers’ rights in the future is the misclassification of workers in the gig economy. 

Companies often classify workers as independent contractors to avoid providing minimum wage, overtime pay, health insurance, and workers’ compensation benefits. This misclassification deprives workers of essential protections and benefits guaranteed to employees under labour laws. Comprehensive reforms are needed at the legislative and regulatory levels to address the challenges of worker misclassification in the gig economy. Policymakers must update labor laws to provide precise guidelines for worker classification and ensure that gig workers receive fair wages, benefits, and protections. Additionally, regulatory agencies must increase enforcement efforts to hold companies accountable for violating labour laws and misclassifying workers. 

Case law has played a pivotal role in bringing the issue of worker misclassification to the forefront. A prime example of this is the Dynamex Operations West, Inc. v. Superior Court of Los Angeles case, where the courts clarified the criteria for determining worker classification, with a focus on factors such as the level of control exerted by the employer and the worker’s economic dependence on the employer. In this instance, the court ruled that there were sufficient similarities among the delivery drivers involved to allow them to collectively sue as a group. The court was attempting to discern whether the drivers should be considered employees or independent contractors based on the rules for the transportation industry. Subsequently, the court established that it was acceptable for workers to bring this case as a class action rather than each driver having to sue individually. This case serves as a stark reminder that despite legal rulings and enforcement efforts, worker misclassification remains pervasive in the gig economy. 

Social movements and advocacy efforts have also played a significant role in shining a spotlight on the plight of gig workers and advocating for reforms to safeguard their rights. Organizations such as the Fight for $15 and Fairness have galvanized workers and activists to demand fair wages, benefits, and labour protections for gig workers. There have been recent strides in improving conditions for workers in precarious industries. After two years of concerted efforts, Starbucks Workers United agreed to recognize workers at non-union stores’ right to unionize. One of the key factors contributing to Starbucks’ successful organization under Federal Labor Law was the fact that the company’s owner, Tata Consumer Products, operates restaurants, providing the union with a single corporate entity to engage with. 

It is fascinating that after twelve years of persistent advocacy, workers in the Fight for $15 campaign established a Fast Food Council in California, including representatives from workers, industry, and government, to regulate wages in the fast-food sector. These successes demonstrate the potential for collective action to bring about meaningful change in the labour landscape, even in the face of significant challenges. While there is still work to be done, such as negotiating fair contracts and organizing non-union stores, these victories highlight the enduring relevance of federal labor laws such as the National Labor Relations Act (NLRA), particularly when workers are empowered, and conditions are conducive to collective action. These movements have raised public awareness about gig workers’ challenges and pressured policymakers and companies to address worker misclassification and improve working conditions. 

Overall, fostering dialogue and collaborating with stakeholders, such as workers, employers, policymakers, and advocacy groups, is essential to finding solutions to the challenges facing workers’ rights in the gig economy. By working together, we can build a more equitable and inclusive labor market that respects the rights of all workers, regardless of their employment status.

Reflections from Charles Joseph

Employers classify millions of workers as independent contractors, leaving these workers without critical labor protections and saving employers money. As a result, misclassifying employees as independent contractors is a growing problem, as MacKeracher argues. 

While local protections such as the NYC Freelance Isn’t Free Act provide some wage protections for independent contractors, what about the rights of workers who aren’t actually independent contractors? Employment lawyers must continue the fight for misclassified workers, while working with policymakers and advocacy groups to address the root cause.

Zoe MacKeracher holds a bachelor’s in political science and work and labour studies from McMaster University. In the fall, she will enroll in the Canadian and American Dual JD program at the University of Detroit Mercy School of Law and the University of Windsor Faculty of Law, the only comparative law program of its kind in North America. Contact MacKeracher on LinkedIn. 

Charles Joseph has over two decades of experience as an NYC employment lawyer. He is the founder of Working Now and Then and the founding partner of Joseph and Kirschenbaum, a firm that has recovered over $140 million for clients.