"Dependent Contractors" in the Gig Economy: A Comparative Approach

By Cherry, Miriam A.; Aloisi, Antonio | American University Law Review, January 1, 2017 | Go to article overview

"Dependent Contractors" in the Gig Economy: A Comparative Approach


Cherry, Miriam A., Aloisi, Antonio, American University Law Review


INTRODUCTION

Recently, there has been a spate of lawsuits across the United States alleging that platforms in the ?on demand? economy have misclassified their workers as independent contractors.1 In response to the litigation and widespread confusion about how these workers should be classified, there have been proposals for a ?third? or ?hybrid? category to be created in the United States, situated between the categories of ?employee? and ?independent contractor.? Regardless of whether these workers would be denominated ?dependent contractors? or ?independent workers,? these proposals for establishing a hybrid category have sparked debate and controversy.2 Proponents advocate that an intermediate category is necessary for the modern economic and technological realities of the gig economy. They also suggest that a third category is a novel innovation, appropriately crafted for the era of digital platform work.3

In fact, the intermediate category between employee and independent contractor is not new. Many foreign legal systems have already had decades of experience with implementing an intermediate category.4 In this Article we employ a comparative approach and examine the laws of three countries that have such experiences with a third category: Canada, Italy, and Spain.5 These legal systems have had varying success in some instances and misadventure in others.6 Before reflexively launching a hybrid category for platform work in the United States, we should seek to understand and evaluate the experiences of other nations in their implementation of the intermediate category.

Classification as an employee is a "gateway" to determine who deserves the protections of labor and employment laws, including the right to organize, minimum wage, and unemployment compensation, to name just a few of the benefits that are part and parcel of employee status.7 As such, classification as an employee is "an important instrument for the delivery of workers' rights."8 Further, it is important to note that lessons we can draw from the on-demand economy are not specific only to platforms or gig jobs. Increasingly, work in the modern economy is becoming casualized, outsourced, and broken apart.9 Workers are being managed by and through data, often through algorithms, and-even without a platform-many sectors are seeing the rise of the just-in-time workforce.10 Rather than create a special classification category only for the gig economy, any proposal for a new category would ideally be formulated to ameliorate conditions for other forms of precarious work and fissured workplaces.

This Article proceeds by first providing a brief context on crowdwork and the gig economy. Part II summarizes the current proposals for an intermediate category for the gig economy in the United States. Part III describes the legal systems of Canada, Italy, and spain, and their experiences with implementation of the third category. Canada's implementation was perhaps the most successful, focusing on expanding the coverage of laws aimed at "employees" to encompass vulnerable small businesses and tradespeople. Italy, on the other hand, saw systemic arbitrage between the standard employment category and the intermediate category. The result was confusion and the stripping of workers' rights by misclassifying them downwards. Spain revised its laws fairly recently, but because of burdensome requirements and a seventy-five percent dependency threshold to enter the third category, the category covered few Spanish workers.

Informed by these experiences, Part IV provides a detailed analysis of the larger implications of the three national case studies for labor law. These policy suggestions are guided by two overarching values: fairness for workers and safe harbors for platforms that are truly engaging in volunteerism-based work, community-organized business models, or only de minimis engagement with the paid labor force. For the first value of worker protection, legislators, legal scholars, and commentators must be cognizant of how establishing a third category could result in increasing arbitrage between the categories. …

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