The Gig Economy is Harmful to Consumers and Workers

Unpredictability in the work place has become harsh reality for many workers. We now have a gig economy, and it is growing rapidly and changing the nature of the employer-employee relationship. According to a report from the Government Accountability Office, gigs now comprise 40 percent of these nontraditional jobs.

In a report by, the emergence of the gig economy is the result of changes in the work environment. According to a survey from the Pew Research Center, millennials wanted to focus more on satisfying themselves, having more free time and having more control and flexibility over their work schedules. As a consequence, employers cut back on medical coverage, retirement plans and many other benefits from social safety nets.

The recession from 2007 through 2009 brought another reality problem. Employers began to hire more people as independent contractors to save money. These jobs did not offer vacation days, workers’ compensation, paid sick leave, retirement programs or death benefits for anyone killed on the job. As the unemployed scrambled for jobs, these temporary gigs were often the only jobs available.

The Department of Labor regulates employers to make sure they are in compliance with federal and state labor laws. There are minimum worker safety standards established by the Occupational Safety and Health Administration. These regulations protect workers by defining safe workday time limits, creating mandatory rest breaks and obligatory reporting of accidents. Violations of these regulations will subject employers to serious penalties.

Gig employees are not provided with these same safety protections. There are no limits for hours at work and no mandatory rest breaks. The absence of these controls can subject gig workers to exhaustion and fatigue.

Employers do not like to train gig workers because this could be construed as exercising too much control over them, and they could become reclassified as full-time employees entitled to all benefits. This absence of training can lead to an unsafe work environment.

Employers do not get to decide who is an independent contractor and who is a full-time employee. There are laws and court rulings from cases that define the characteristics of a gig worker.

The case of S.G. Borrello & Sons, Inc. v. Department of Industrial Relations established the criteria in 1989 for determining which workers are independent contractors. This case considered who controlled the details of the work, who provided the tools needed for the job, the form of payment and the length of the term of employment. These factors have become the tests applied to gig workers to determine whether the employer is obligated to provide benefits or not.

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