Stand back, the FTC is here to police gig work

The US Federal Trade Commission on Thursday fired its first warning shot at companies that exploit gig workers. The FTC is concerned that gig workers – who typically log into an app to be assigned paid tasks, such as delivering food – haven't been treated fairly by businesses. Perish the thought. Gig workers, classified …

[MachDiamond]

Employees

If the company doesn't have any employees doing the work, they shouldn't be able to hire independent contractors. I see where it can make sense to be able to handle peak business by having people that can be called in as needed, but if the business plan contemplates no regular employees performing the work, that's just somebody circumventing labor and tax laws to line their own pockets.

[doublelayer]

Re: Employees

That's too absolute. For example if they contract out their IT to an external provider, then they may have no IT staff as employees, but their provider is still a contractor. The distinction is usually down to how much power the contractor has over their work, such as setting their prices, tasks they'll perform, hours they'll work, etc. Many companies with this business model do provide those doing the work with the power to select their hours, but often nothing else,, so they're in a middle area where laws or courts have to decide whether the people are employees or contractors.

[MachDiamond]

Re: Employees

"For example if they contract out their IT to an external provider,"

That's likely going to pass muster. When I had a manufacturing company, I used an outside machine shop to make parts for me. The big difference is if you are that external IT company and don't employ people directly to do the work. The machine shop I used had their own employees, machines and would tell me when they could complete the work I sent them. I didn't have much control other than specifying the parts I wanted made.

Some of the delineations need to be drawn rather boldly. It's too expensive and time intensive to have courts hearing cases on a continuous basis to make a determination about situations that should be clear cut. Another issue is attorneys milking the system for billable hours.

In California there has been a big problem with a law that was passed to make Uber/Lyft and their ilk classify drivers as employees, but they managed to get an exemption for themselves. The fallout is that freight brokers that arrange shipments have to classify the truckers they assign work to be classified as employees. The brokers act as the App to match loads with truck owners (which may be small companies looking to outsource booking). The truckers can look at the loads and payment being offered and take the gig or leave it. The broker can also consolidate loads so a trucker can have a full load on each assignment they take. The broker doesn't want to maintain a fleet and the truckers don't want to spend their day dickering for jobs. The people wanting to move their goods want to deal with one entity rather than spend their whole day dickering with a bunch of drivers until they find one that will take the job.

[katrinab]

Re: Employees

There are some questions here:

Is fixing computers a central part of your business? If you are a company that provides IT maintenance services, then it is. If you are a shop that sells cupcakes and have a computer that occasionally breaks down, then it isn't.

If you are a bank that has an entire datacentre full of computers that need regular maintenance, and there's pretty much always someone there doing it, then that person probably is, but if that person needs some occasional outside help for more specialist tasks, then that other person isn't.

Then there's things like the degree of control you have over the person. The cake shop owner wants the computer to go from not-working to working, and has no idea how the contractor will do it. The IT maintenance company will be assigning people based on skill levels, and will have a pretty good idea from the initial call what needs to be done.

[doublelayer]

Re: Employees

You can be a company that sells IT services without IT employees doing the work. The way you do that is matching a contractor to a client, allowing the contractor to specify prices and details. Of course you can then argue whether that company is an IT provider or just a convenient way to find a contractor, but they're still focusing on IT. I still think the best way to decide if someone should be designated a contractor is the degree of independence they have in choosing and performing their tasks.

The legal definition takes up a lot more pages and varies between locations. For example, some American states use a three-question test to decide, but even they disagree about something as central as how many questions you have to answer yes to before a person becomes a contractor. One of the questions contains as a part "The work takes place outside the usual course of the business of the company", which can lead to many arguments about what the business is. For example, for the example above, is their main business a talent-finding company for IT people, or is their main business providing IT services?

[iain666]

Re: Employees

"matching a contractor to a client, allowing the contractor to specify prices and details" is in no way being a "company that sells IT services", it's managing a directory of people and companies that provide IT services.

It's business is providing a better way, in a particular sector, to match client requirements to appropriate contractors and either the clients will pay a fee for that service or the contractors will be paying to be listed on the service. The employees of this company will be doing the work of maintaining the directory of available contractors and matching them with client requirements.

[doublelayer]

Re: Employees

On the face of it, that would seem to be their model. That is if we use your assumptions for how they make money. They may not necessarily do all of that. For example, they could provide services to the contractors, such as handling billing. They could provide other services to the buyer, such as providing them with additional contractors in the case of an emergency or their original one becoming unavailable. All of those changes could be made without restricting the contractor's ability to set conditions on their work, but the company in the middle now becomes more of a service provider than just a talent agency. If a lawyer wanted to, they could attempt to claim that it was one in order to suggest that the person doing the tech work should be an employee, and they'd have to fight it out.

[ecofeco]

Re: Employees

Why guess and speculate when you can easily look up what defines a contractor versus an employee?

Hint: real contractors have more freedom than modern gig workers.

[Michael Wojcik]

Re: Employees

It's conceivable the answer is not precisely the same in every jurisdiction.

[iron]

Re: Employees

So a farm would be unable to hire seasonal workers to bring in the harvest?

[MachDiamond]

Re: Employees

"So a farm would be unable to hire seasonal workers to bring in the harvest?"

In California, there is a "seasonal worker" classification for agriculture. There are also requirements about pay, conditions, etc that are very similar to any other job. What isn't included is unemployment coverage since the job period ends when the work (planting, harvesting, trimming, putting out the irrigation, etc) is complete.

The regs may also apply towards staff brought in for the holidays by retail stores and shipping companies. Fun fairs, theme parks and water parks may also be allowed to classify employees as seasonal if they aren't open year round or put on extra staff during busy parts of the year.

[that one in the corner]

Americans want to participate in gig work for the flexibility, not for wages and benefits alone

The ONLY reasons to get involved in ANY work is for the wages and benefits!

Well, okay, there are some things (programming, other artistic endeavours) that are so much fun people will do them anyway (once the basic wages and benefits are taken care of). But somehow I don't think there are many people who will do the sort of thing these "gig" jobs entail just for the intellectual pleasure it provides.

[ecofeco]

They do indeed have a Dept of Labor

The Dept of Labor exists, but unfortunately it's been given the budget of a gig worker for the last, oh, 40 years.

You know, less government regulation and interference and all that.

No, no, nothing nefarious going on here! /s

[Auntie Dix]

Good for the FTC

Reality:

Using scum-company middlemen to convert FTE jobs into sh!tty-benefits contractor positions has been a tactic that U.S. corporate lawyers have supported like flies on a pile for over forty (40) years. Promulgated by lying-scum Uber, Lyft, etc., tycoons, the "gig" BS of recent years, the latest FTE-to-contractor subterfuge, has spread like herpes.

The U.S. is long overdue for a vanquishing Federal legal cure.

—————

Perfect:

"No matter how gig companies choose to classify them, gig workers are consumers entitled to protection under the laws we enforce," said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. "We are fully committed to coordinating our consumer protection and competition enforcement efforts within the FTC as well as working with other agencies [such as the Department of Labor] across the government to ensure gig workers are treated fairly."

Typical, disingenuous @sshole:

“The thrust of the FTC’s policy statement is that gig work is inherently unfair, but millions of Americans choose gig work because of its flexibility and how it's helping them make ends meet in the face of inflation," said Chamber of Progress [Porcelain] CEO Adam Kovacevich.

Can't wait. Let's hope that the FTC delivers:

The agency, today chaired by Big Tech arch-critic Lina Khan, said it intends to look for: deceptive or unfair pay practices; undisclosed costs or terms of work; and unfair or deceptive practices by an automated boss – e.g. algorithmic abuse. It also says it will keep an eye out for unfair contractual terms, unfair competition, wage fixing, and market monopolization.

[Anonymous Coward]

The gig is up

Gig work is of the Devil.

A form of semi-legal wage slavery.

Rich people abusing the less well off.

Retired now, lucky to have always had a solid job (and some lucrative contracting).

I despair for the young ones starting out.

[elregidente]

Minimum wage laws ban low-value work

Not diving into the deeper issues of how these companies behave (especially as in my experience all large tech companies behave atrociously), I have to say that minimum wage laws have the effect of banning all work which produces less value than the cost of the minimum wage.

There are people with *no job at all*, because the jobs they could do, do not exist, because there is a minimum wage.

I'm of the view if you want to raise wages, either directly give people money from tax or set up training and education programmes; rather than create minimum wage laws.

[Sherrie Ludwig]

Wait, 19%? 62%?

The study also found "three out of every five gig workers (62 percent) lost earnings because of 'technical difficulties clocking in or out,' compared with 19 percent of W-2 service-sector workers."

So, almost one in five service employees of regular W-2 businesses are shafted? And almost two-thirds of gig service employees? WHY IS THIS NOT FRONT PAGE NEWS? Oh, wait, these peons don't contribute enough to political campaigns. Sigh.

[Kev18999]

I don't think gig work companies like Uber/Lyft is the problem, the main problem lies that these workers aren't taking jobs that offer employee benefits. The reason why so many help wanted ads because these gigworkers do not want to be tied down and be told set hours like employees. So you can't have regulations that make gigworkers into employees yet still offer the choice or freedom of contractor. That's a paradox.

The solution will be don't create these over-reaching regulations, let these gigworkers suffer. If they want a job with benefits, there are plenty of help wanted signs.