Employee or Independent Contractor?

Union weighs in, says gig economy workers should be W-2 employees

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Staffing Industry Analysts reports that the AFL-CIO Executive Council issued a statement supporting the classification of gig workers as employees.

See the full story at Union weighs in, says gig economy workers should be W-2 employees 

The AFL-CIO statement said:

Under current law, only workers who are defined as “employees” are protected by the National Labor Relations Act (NLRA) and enjoy minimum wage, overtime, unemployment insurance, workers’ compensation, and family and medical leave. Generally speaking, most protections against discrimination on the basis of race, gender, religion, age, disability and national origin are available only to employees and job applicants….

The reasons why businesses want to shed their responsibilities as employers are not new or limited to the on-demand economy. Since the 1980s, Wall Street’s pursuit of short-term returns in the name of “maximizing shareholder value” has pressured all kinds of businesses to evade their responsibilities as employers, and shift risk to workers.

Corporations have responded to these pressures by outsourcing and off-shoring jobs, by switching to workforces composed of “permatemps” and part-time workers, by using just-in-time scheduling and adopting the franchising model, and by misclassifying their employees as independent contractors. The new platforms that treat workers as independent contractors are responding to similar demands from venture capital investors for high returns.

For decades these various forms of precarious work have been the reality for a significant and growing part of the workforce, and especially for people of color, immigrants and women. Often the conditions of work meet the definition of an “employee,” and yet they still lack the bargaining power to improve pay and working conditions. Employee status by itself is no guarantee of decent work, but the rights and protections of employee status long have been the foundation on which we strengthen our bargaining power.

To address these problems, we need to crack down on businesses that commit payroll fraud by misclassifying workers. We also should create incentives for businesses to treat workers as employees. More broadly, we need to reduce the existing incentives for companies to shed their responsibilities as an employer—with respect to “employees” as well as nonemployees—in ways that weaken the bargaining power of workers and encourage various kinds of “precarious work.” If we do not find new and innovative ways to deal with these pressures that are ultimately driven by Wall Street greed, these problems will only get worse.

We also need to develop new and effective worker organizing models that adapt to changes in the world of work. For more than 100 years, America’s labor movement has built collective power for employees working in various kinds of precarious and vulnerable work, turning bad jobs into good jobs. Our efforts transformed entire industries so generations of workers were able to sustain families as part of thriving communities. These difficulties are not new or insurmountable. This is what unions do.

We believe there is no basis for the pessimistic view that good jobs soon will be a thing of the past, nor that most or all work soon will be precarious. Workers in the future can enjoy the rights and protections of employees, and workers with less marketable skills need not be relegated to cobbling together a living from various odd jobs. A better future can become a reality if we make the right choices now

Read the full statement at The Policy Choices We Make Now Will Help Determine the Future of Work

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