Gig Workers Need Updated Wage and Hour Law, House Panel Chair Says

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By Tyrone Richardson

The head of the House workforce committee May 3 told an audience of innovators that she would be open to updating the Great Depression-era Fair Labor Standards Act to better serve the on-demand workforce.

“This outdated regulatory structure is complicated enough for most American workers and employers. But for those in the sharing economy, it simply doesn’t make sense,” said Education and the Workforce Committee Chairwoman Virginia Foxx (R-N.C.).

“It’s like trying to fit a square peg in a round hole. The self-employed individuals who rely on the sharing economy for work don’t fit neatly into obsolete job categories defined in another era,” she said.

Her comments at the Consumer Technology Association’s New American Jobs Summit come amid calls for the federal government to tweak employment tax and worker classification laws in response to the booming on-demand economy.

The on-demand workforce, also dubbed gig workers, are often treated as independent contractors who usually aren’t offered benefits and don’t get minimum wage, overtime and workers’ compensation protections. The FLSA includes provisions requiring employers to pay minimum wages and time-and-a-half for overtime.

Lawmakers Discuss New Worker Classification

Both Republicans and Democrats have debated how the federal government could tweak worker-protection laws. That includes options such as creating a new classification to cover workers who fall between traditional employees entitled to a full range of protections and benefits and treating independent contractors as self-employed entrepreneurs.

Lawmakers are seeking to get a firmer understanding of the workforce with help from the Labor Department. The agency is planning to add new questions to its contingent worker survey this month. The survey data haven’t been updated since 2005.

Foxx’s comment about changing laws for the gig economy workforce prompted a tepid response from Rep. Mark Takano (Calif.), the Workforce Protections subcommittee ranking Democrat.

Takano told Bloomberg BNA May 3 that Foxx’s views may follow a “pattern” of recent legislation. The recent House passage of the Working Families Flexibility Act ( H.R. 1180, S. 801), which would amend the FLSA to allow employers to offer paid time off instead of time-and-a-half wages for overtime hours, has drawn fire from Democrats.

“When she talks about updating the laws, what I hear her say is we need to throw out protections instead of how these workers can get a fair deal,” Takano said. “It’s been a pattern of workers not being protected.”

— Jon Steingart contributed to this report.

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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