Labor Chief Wants Nimble Government for Future of Work

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By Chris Opfer

Labor Secretary Alexander Acosta is looking for something that’s often hard to find in the federal government: speed.

Acosta Oct. 25 said the Trump administration and lawmakers in Congress need to start thinking about how to update laws and regulations to better keep up with advances in workplace technology and the rise of the gig economy. Those changes are already reshaping the relationship between businesses and their workers, as well as the types of skills that will be needed for jobs in the future, he said.

“I think one of the challenges is can our institutions keep pace with the pace of change in the private sector,” Acosta said during an event organized by the Jack Kemp Foundation. “Government has an obligation to keep pace and to re-examine the rules that regulate the employer-employee relationships that have an impact on the ability of individuals to work in a modern system.”

That’s something that may be easier said than done in a government in which regulations take time and bipartisanship on Capitol Hill can be tough to come by. Acosta in his first six months on the job has taken a cautious approach and urged restraint in executive rulemaking. His comments also come as bad blood between President Donald Trump and certain GOP lawmakers, as well as a Senate filibuster rule that requires some bipartisanship to pass bills, threaten to stall the legislative process.

Sen. Ben Sasse (R-Neb.), who has been critical of Trump and who joined Acosta at the event, declined to talk about how recent spats between the president and Sens. Jeff Flake (R-Ariz.) and Bob Corker (R-Tenn.) might affect the immediate GOP legislative agenda. He also said Congress still has to get a better grip on issues likely to face workers in the future before lawmakers can craft a legislative response.

“The stuff I care most about is 10 and 20 years into the future and right now, we don’t even have a framework for where we are trying to get in terms of what it’s going to be like to have multi-career lives,” Sasse told Bloomberg Law. “We don’t talk about that at all in policy right now. We’re not even close to having a conversation that would produce legislation for lifelong work.”

Gauging the Gig Economy

Sasse and Acosta pointed in particular to the burgeoning gig economy as a potential area of interest.

Gig workers—like Uber and Lyft drivers, Instacart personal grocery shoppers, and Handy home cleaners—are typically classified as independent contractors. That means they’re not protected by wage and hour laws, aren’t entitled to unemployment benefits, and aren’t covered by workers’ compensation insurance. Businesses are also hesitant to offer gig workers training and benefits for fear of being forced to reclassify them as traditional employees.

The trouble for policymakers is that they’re still trying to wrap their heads around what gig jobs are and how technology is changing the way that people work.

The DOL’s Bureau of Labor Statistics in the waning months of the Obama administration revived a survey supplement aimed at gauging the temporary and gig workforce. The Freelancer’s Union estimates that more than a third (36 percent) of workers get at least some of their income from freelance jobs. That data, along with numbers gleaned from federal tax filings, suggest that many workers are using gigs to moonlight or pick up extra income while still holding down a traditional job.

The spread of gig jobs has shined a new spotlight to an old debate over worker classification. Uber and Lyft are embroiled in litigation challenging their classification of drivers as independent contractors. Similar lawsuits over independent contractor status in more traditional jobs, like FedEx delivery drivers and construction workers, regularly wind their way through federal and state courts.

Some advocates have pushed for a third classification—somewhere between an employee and a contractor—that would offer workers certain protections without opening businesses up to the full liability under labor and employment law that comes with being treated as an employer. Portable benefits systems allowing multiple employers to kick into the same plan for workers with more than one job have also gained some interest.

Meanwhile, the Labor Department has taken steps under Acosta that could expand the independent contractor market. The DOL in June scrapped an Obama-era guidance document in which the department took the position that “most workers” should be classified as employees under federal wage-and-hour law. Critics of those memos said the Obama administration was using informal guidance documents to avoid the hefty procedural requirements associated with formal rulemaking.

Acosta has also signaled that he sees limits to the Labor Department’s ability to use rules to update its interpretation of federal laws, rather than leaving it to Congress to make changes to adapt to new workplace realities.

“Rulemaking is hard, and it is necessary,” Acosta said during a recent speech to the Federalist Society. “Congressional action may be hardest of all, but it is demanded by our Constitution.”

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bna.com

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