We recently told you that the gig economy could be the biggest winner of inflation while also awaiting watershed moments. Recently, that wait ended in disappointment for gig work companies operating in Massachusetts, where the state’s highest court shut down a bid from these companies (including Uber and DoorDash) that wanted their drivers to be definitively classified as independent contractors, rather than employees.
This ruling will surely have future effects on the wage and tax-liability fronts for these companies, and NLRB General Counsel Jennifer Abruzzo continues to push for overturning the 2019 Velox Express decision, which found that a courier company was not required to classify independently-contracted drivers as employees. Analysts believe that a Velox overturning is unlikely to happen, but the NLRB may have another trick up its sleeve – a new partnership with the Federal Trade Commission.
The two agencies outlined their agreement and declared the gig economy to be a key focus for future labor developments. The NLRB and FTC will “closely collaborate by sharing information” and “partnering on investigative efforts within each agency’s authority.” It’s worth noting that previously (in 2017), the FTC took aim at both Uber and Amazon over issues involving gig drivers. Those conflicts ended with the FTC successfully suing both companies for many millions (which ended up in the hands of drivers). One can expect a similar agenda from this new partnership, and gig work companies should prepare themselves for additional federal scrutiny.
Meanwhile in the gig-economy lab of California:
Truckers are not thrilled with the AB5 law signed by Governor Newsom, and they’re asking him to delay enforcement while arguing that the law will destroy jobs amid ongoing inflation woes. These truckers are protesting (and clogging highways) because they are faced with a difficult choice – become regular employees (something that these truckers do not want, given that they prefer independent contractor status) or declare themselves to be small businesses, which requires them to dive into a labyrinth of insurance and licensing requirements.
The California Trucking Association added their voices to the dissent, but the AB5 is not going anywhere anytime soon because the Supreme Court declined to hear a relevant case during their most recent term.
All told, the law places the state’s approximately 70,000 truckers into ambiguous territory, and whenever their status becomes clearer, expect a ripple effect upon the already stressed supply chain. Meanwhile, the NLRB is clearly hoping to permanently modify the definition of “independent contractor” on a federal level, which could lead to more complications in many industries.
