Would Laws Aid Gig Workers or Kill Growth? Lawmakers Get Earful

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Tyrone Richardson

Sharing-economy groups and employee-rights advocates clashed at a congressional hearing Sept. 6 over the need for new laws in response to the industry’s burgeoning workforce.

Gig workers for sharing businesses like Uber and Lyft are largely considered independent contractors, who don’t get minimum wage and overtime protections and aren’t entitled to unemployment benefits and workers’ compensation insurance.

The House Education and the Workforce Committee heard from were Michael Beckerman, president and CEO of the Internet Association, and Sharon Block, a Labor Department official during the Obama administration, among others.

Beckerman urged lawmakers to be careful not to stifle growth. The Internet Association describes itself as “the unified voice of the internet economy.”

“Policymakers and regulators have put up roadblocks to consumer choice and competition” in some communities, Beckerman said. “In these areas, the community is worse off when arbitrary barriers are placed on new entrants,” he said.

Block, executive director of Harvard University’s Labor and Worklife Program, had a different take. Basic labor standards should be incorporated into the shared economy, she suggested.

“We have a danger here of placing the online platform economy in one category and saying that our labor and employment laws don’t fit,” she said. “If you look at the specifics of many of these businesses, which is what the law compels us to do, and you look at the facts and circumstances, you will see current labor laws do fit quite nicely.”

The hearing comes amid calls for the federal government to tweak employment tax and worker classification laws.

Third Type of Worker Proposed

Both Democrats and Republicans have talked generally about updating federal laws such as the Fair Labor Standards Act, which offers minimum wage and overtime pay protections, to create a third category of worker.

Democrats in this Congress introduced the Portable Benefits for Independent Workers Pilot Program Act ( S. 1251, H.R. 2685). The measure would create a Labor Department grant program aimed at local governments and nonprofits to experiment with health insurance and other portable benefits for the workforce.

The House version of the bill has three Democratic co-sponsors and is assigned to the Workforce Committee.

Beckerman’s suggestion about avoiding overregulation brought agreement from some committee Republicans, including Rep. Phil Roe (Tenn.).

“One of the things we can do to stop this sharing economy and all this growth is to regulate it to death and basically that’s what ends up happening here in Washington,” he said. “To fix a small problem we end up stomping out an entire way to make a living.”

Roe’s comments were echoed by Rep. Virginia Foxx (R-N.C.), the committee’s chairwoman, who said Congress needs to make sure “outdated federal policies don’t stand in the way.”

“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. “So, there are important questions over how we can modernize policies to meet the needs of the future.”

Balance Urged

Committee ranking Democrat Rep. Bobby Scott (Va.) said Congress “must strike the right balance,” and strive for a “just and reasonable” policy.

“We can support responsible growth while still maintaining what should be a bipartisan commitment to workers’ rights to a fair and stable wage, safe workplaces, and their ability to organize and collectively bargain,” he said.

“Any suggestion that we can only do one or the other represents a false choice.”

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; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law