Redefining Employment for the Modern Economy

Source: Brishen Rogers, American Constitution Society (ACS), ACS Issue Brief, October 2016

From the blog post:
The explosive growth of Uber and other on-demand labor platforms has brought public attention to a longstanding issue facing workers in this country: the fissuring of employment. Fissuring comes in many forms, including misclassification of employees as independent contractors, subcontracting and franchising arrangements.

Such strategies can deprive workers of their rights under our employment laws, most of which define employment per the common law “right to control test.” That definition is narrow, failing to reflect the economic realities of modern work relationships. It is also notoriously difficult to apply in practice, which increases litigation costs and disempowers low-wage workers.

This is not a small problem. Wage and Hour Administrator David Weil estimates that there are “over 29 million workers in just five industries affected … including in the construction, hospitality, janitorial, personal care and home health care industries.”

Unfortunately, some prominent reform proposals—such as to create a new legal category of worker that would slot between “employee” and “independent contractor,” with limited employment rights—would move us backwards rather than forwards. Ethically speaking, workers in fissured relationships are no less deserving of basic protections than standard employees. Creating a third category of worker would also make employment status litigation even more complicated and more expensive.

In a new issue brief for ACS, I propose an omnibus employment status bill to address such challenges. The central reform would redefine employment under the core federal labor/employment statutes per the broad “suffer or permit” test from the federal Fair Labor Standards Act. In misclassification cases under that test, courts’ and agencies’ task is not to determine whether the putative employer enjoys a right to control the performance of the work, but rather “to determine whether the worker is economically dependent on the employer (and thus its employee) or is really in business for him or herself (and thus its independent contractor).”