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National Employment Law Project
90 Broad Street, Suite 1100, New York, NY 10004
People who work for a living should be entitled to a living wage, rights at work, employment benefits and exercise collective, democratic power. It shouldn’t matter what job we do or whether a worker is dispatched through an app or labor platform.
Yet across the country, millions of people who obtain work through an app–Instacart and DoorDash delivery workers, Uber and Lyft drivers, and Handy home service workers, to name a few–cannot access basic labor protections because these app-based companies tell them they have none. Further, while gig work is perceived to be part-time, freelance work, the reality is that 72 percent of app-based gig workers work full time.
This page provides information for workers, advocates, and policy makers to learn how these companies are designing laws that diminish workers’ voices and futures so we can fight together for all workers to have universal rights at work.
Most labor platforms claim that the workers building their businesses are not their employees. In reality, however, many app-based workers bear all of the risks of being in business for themselves and reap none of the rewards.
Unlike a true “independent contractor” they do not have the autonomy to build a base of customers, set their own rates, make their own decisions about the services they offer, or otherwise manage their own business.
At the same time, gig companies deny their workers the many protections and benefits that come with being an employee, like minimum wage and overtime, workers’ compensation, and unemployment insurance—critical protections for workers who get sick or injured on the job, or who otherwise cannot work.
That is why gig workers are organizing to expand their rights on the job.
But in many places, app-based workers DO have these rights. Consult with a trusted ally, like a workers’ center, union, or legal services provider to find out what the law is in your state.
Companies claim that app-based workers run their own business. They tell workers that they do not have the right to minimum wage, overtime pay, workers’ compensation, unemployment, state disability insurance, or access to protections from discrimination, including sexual harassment. They claim workers have no right to organize with a union or workers’ center.
But in many places, app-based workers DO have these rights. Consult with a trusted ally, like a workers’ center, union, or legal services provider to find out what the law is in your state.
If a company treats you as an independent contractor, in theory you are operating an independent business, with specialized skill, capital investment, and the ability to engage in arms-length negotiations over the terms of a job.
In key industries in our economy, however, businesses falsely claim workers have their own separate business. This practice is prevalent and has become standard operating practice for companies looking to save on payroll costs, outbid competitors, or avoid workplace regulations.
This is sometimes called “payroll fraud” or “independent contractor misclassification.”
Under the law, these workers should be employees. They often work on an ongoing basis for one company, which tells them when, how, where and for what price to do their work, and disciplines them if they fail to meet the corporation’s exacting standards.
Read more about the difference between an employee and an independent contractor.
In her remarks to Congress in March, 2021, NELP Executive Director Rebecca Dixon explained, “Today’s app-based or ‘gig’ economy is frequently dressed up in talk about ‘modern innovation’ and the ‘21st century of work.’ But, in reality, this type of precarious, contingent work is nothing new.”
Dixon pointed out, crucially, that workers of color have always been heavily concentrated in these kinds of exploitative industries, which makes it that much more disturbing that companies like Uber and Lyft claim to be on the side of racial justice in their marketing.
Black and Latinx workers provide a disproportionate share of digital labor platform work in the United States. Bureau of Labor Statistics data shows that Black and Latinx workers make up almost 42 percent of workers for Uber, Lyft, and other “electronically mediated work” companies, although they comprise less than 29 percent of the overall U.S. workforce.
In the past decade, app-based companies like Uber and Lyft have been able to rewrite the laws in 41 states to benefit themselves—and undermine protections for workers and consumers in the process. They’ve cut off local jurisdictions, like cities’ and counties’, from regulating them at all.
The speed and sweeping effectiveness of the industry’s use of this strategy, known as state interference (or preemption), is unprecedented—and other companies are replicating Uber and Lyft’s model as new technologies arise.
Visit this page to learn more about how many companies in the app-based economy are overriding laws and what we can do to prevent it.
They’ve also convinced state legislators in half of the states to simply exempt them from any responsibilities towards workers. On November 3, 2020, after a $220 million misinformation campaign, California voters passed Proposition 22, denying certain app-based workers the rights to the state minimum wage, paid family leave, paid sick leave, overtime pay, and state disability and unemployment insurance.
Now Big Tech has teamed up with other big businesses, like the temp staffing industry, retail, multi-level marketing, and logistics giants to erode worker power and labor standards across industries, cementing income, racial, and gender inequality in the U. S.
The ABC test is a simple, three-prong test for establishing employee status. The ABC test presumes a worker is an employee unless: (A) the worker is free from the employer’s direction and control, (B) the work is outside of the “usual course” of the employer’s business, and (C) the worker is engaged in an independent trade, occupation, or business. It exists in some form in over half of the states’ unemployment insurance laws, but also is used in wage and hour laws. Some states have passed specialized laws that employ the test in certain sectors. This US map shows where the test is used.
National Employment Law Project
90 Broad Street, Suite 1100, New York, NY 10004
