Report: Transforming Gig Jobs Into Good Jobs

New York, NY
—Amidst growing public concern about how on-demand companies are treating their workers, the National Employment Law Project today issued a report that serves as a roadmap for policymakers interested in ensuring fair pay and working conditions for the growing numbers of workers who drive cabs, clean apartments, deliver goods, and do small tasks for online and app-based companies—often for very little money, with no labor protections and no job security at all.

“Companies in the on-demand economy are creating new ways to acquire, deliver, and perform work, and that’s progress,” said Rebecca Smith, deputy director of the National Employment Law Project and report co-author. “But we believe that technology ought to be used to create a better standard of living for the many, rather than enormous wealth for the few.”

“Our report describes the erosion of workers’ rights in the on-demand economy, where online labor brokers like Uber, Lyft, Taskrabbit, and Amazon’s Mechanical Turk dispatch workers to short-term jobs,” said Sarah Leberstein, senior staff attorney with the National Employment Law Project and report co-author. “While these companies tout their technological innovations, conditions for workers are often reminiscent of turn-of-the-century sweatshops.”

NELP’s report, Rights on Demand: Ensuring Workplace Standards and Worker Security in the On-Demand Economy, explains that while these companies may use innovative technology, there is nothing new or innovative about their business model. They are brokering work, just like the garment “jobbers” of the past and farm labor contractors and staffing agencies of the present.

“The use of online platforms to broker work should not insulate businesses from employer status, nor do the artificial labels these businesses attach to their workers define the employment relationship. Simply put: many individuals working in the on-demand economy are employees, and their employers should treat them as such,” states the report.

Workers classified as independent contractors lose out on basic workplace rights and benefits available to employees, such as the right to minimum wage and overtime pay, workers’ compensation, and unemployment insurance. But companies often try to have it both ways: while they claim their workforce consists of independent contractors, they treat workers as if they were employees, unilaterally setting pay rates and dictating how they should do their jobs.

The report calls for enforcing existing labor standards aggressively and adapting them where and as needed. For example, policymakers can directly require that companies that use IRS-Form-1099 workers abide by labor standards such as the minimum wage and others, and pay into Social Security and state workers’ compensation and unemployment insurance funds. This is the case for some categories of workers in the Social Security Act, who are deemed “statutory employees.” 1099 workers could be deemed statutory employees too.

The report also recommends delivering benefits around which national consensus is emerging, such earned sick and other leave, to on-demand workers. On-demand companies could report into a central pool from which workers could draw time off. This model builds on existing paid leave laws in California, Rhode Island, and New Jersey, which are portable between employers.

Finally, and most importantly, the report urges that on-demand workers have an effective voice at work. Presently, however, on-demand workers called independent contractors lack a process for organizing. Two models exist for ensuring workers have a voice: in Montgomery County, Maryland, a recently passed ordinance establishes a commission, made up of taxi drivers, the public, and taxi companies, that will annually review conditions in the industry and make recommendations for change. In Seattle, a proposed ordinance would deliver a collective bargaining process to taxi and app-based drivers.


Rights on Demand: Ensuring Workplace Standards and Worker Security in the On-Demand Economy


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