According to a recent article published by law professor Cunningham-Parmeter, gig workers “almost certainly” have the rights of employees under current law, and gig companies like Uber and Lyft are simply violating the law. The article, “Gig-Dependence: Finding the Real Independent Contractors of Platform Work,” argues that under the “ABC test,” most gig economy workers are being misclassified as independent contractors, and should be employees.
The History of Independent Contractors
According to the article, courts originally defined independent contractors as workers with enough skills, financial strength, and autonomy to stay independent within the marketplace. This means that independent contractors were typically highly-skilled, autonomous independent business owners, the professor states.
But, gig companies such as Uber and Lyft have now deemed their workers as independent contractors even if they don’t meet these previous standards, says the professor. The article claims that these companies have left many low-skill, low-wage workers to “pull themselves up by their bootstraps” without providing them boots – or straps. According to the professor, they refuse to provide these workers with bare minimum rights, leaving them to struggle on their own with the “poor pay and conditions that come with gig work.”
The Rights of an Independent Contractor v. Employee
Many independent contractors are not awarded the same legal protections as employees. Cunningham-Parmeter details some of the benefits independent contractors are missing, including those listed below. To learn more about these differences, see our article on gig worker’s current rights.
- Minimum Wage: Independent contractors often don’t earn minimum wage. For example, the article reports that various studies have estimated that Uber drivers make somewhere between $3.37 and $13.17 per hour (after expenses).
- No overtime compensation: According to the article, “overtime compensation is unheard of in the industry.” In fact, Cunningham-Parmeter states that Lyft rewards its “Power Drivers” to incentivize people to work more but does not provide these workers with overtime pay to compensate.
- Insurance & Protections: Independent Contractors are not entitled to Social Security, Medicare, or Unemployment Insurance. These necessities are taken away from Lyft and Uber drivers if they are not recognized as employees.
- Health Care: Independent contractors have no federal right to employer-sponsored healthcare. This contrasts with employees, many of whom are afforded healthcare under the Affordable Care Act.
- Anti-Discrimination Protections: Independent contractors are given few workplace anti-discrimination protections under the law. According to the article, this is made worse by the fact that customers can provide biased reviews to drivers, and the platforms have no obvious mechanism in place to distinguish between reviews that are based on race, gender, sexual orientation, disability, etc., and those which are not.
The ABC Test and Future of Independent Contractors
In 2018, the California Supreme Court adopted the “ABC test” for determining independent contractor classification. This decision was then codified by AB5, the new California workers’ rights law that went into effect on January 1, 2020.
The ABC test makes it much harder for gig companies to argue their workers are truly independent contractors.Professor Cunningham-Parmeter explains that “the ABC standard provides a more effective mechanism for scrutinizing the nonemployee designations of gig workers” as compared to previous employment tests, and closely follows the independent contractor standards originally set forth by the courts.
Under the “ABC test,” by default, workers are presumed to be employees, entitled to the minimum pay and protections deemed necessary by society. Someone is truly an “independent contractor” only if the hiring entity can prove three things:
- The worker is free from the company’s control
- The job falls outside the company’s “usual course of business”
- The worker typically operates a separate business from the company
According to the article, for workers for companies such as Uber and Lyft, “the ABC standard would almost certainly categorize these workers as employees.” Not only does the ABC test deter misclassification of workers, but it also broadly extends workplace protections to those who need and deserve them.
The law professor states that by adopting the “ABC test” California is no longer allowing gig companies to “hack” the system, but is holding them accountable for their worker’s pay and benefits. Cunningham-Parmeter believes that gig workers would “almost certainly” be deemed employees under these standards and we agree, which is why we are pursuing Lyft lawsuits and DoorDash lawsuits.