Sharing-Economy Laws Are Congress’ Gig, Labor Secretary Says

From Labor & Employment on Bloomberg Law

November 9, 2017

By Chris Opfer and Ben Penn

The gig economy is shining a new light on old questions about how workers are classified that Congress—not the Labor Department—will have to resolve, Labor Secretary Alex Acosta said Nov. 9.

“We’re a democracy, which means that Congress should take the lead,” Acosta said at an American Bar Association event. “It’s very easy for the executive branch through guidance documents to say ‘this is what we think,’ but that’s not the way democracy works. You don’t make laws through executive fiat, you make laws through the legislative process.”

Online platform companies like ride-hail operators Uber and Lyft have drawn new attention to the worker classification debate. Gig workers are typically classified as independent contractors, rather than employees. That means they’re not entitled to minimum wage and overtime pay, aren’t covered by workers’ compensation and unemployment insurance programs, and typically don’t get other employee benefits. Those classifications are being challenged in courts across the country.

Shortly after Acosta was sworn in, the Labor Department scrapped an administrator’s interpretation in which the department had taken the position that most workers should be classified as employees. He’s said that similar guidance taking an expansive view of joint employer liability wrongly sidestepped Congress’ role in making law.

The restrained approach is likely to be a hallmark of Acosta’s tenure at the Labor Department, especially since the White House has instructed agencies to consider trimming regulations. Acosta said the DOL is looking at the economic impact of various rules, but also wants to limit “government’s impingement on liberty.”

“There are so many regulations that are as much about economics as they are about liberty,” Acosta said. He cited as an example the Obama-era “persuader” rule that would have expanded disclosure requirements for employers that hire advisers to fight unionization. He noted that lawyers criticized the rule for infringing on the attorney-client relationship.

Common Ground for Republicans, Unions

Acosta also told the crowd of labor and employment lawyers that the Trump administration’s relationship with unions will be determined on an issue-by-issue basis.

Acosta, in some of his first public remarks about unions since taking office in April, said he’d prefer that this administration not be judged on how it treats the labor movement as a whole.

“Shouldn’t it be a question of issue by issue?” Acosta said in response to a question about working with labor organizations. “At least in rhetoric, I think that’s what union leadership would say, and I think that’s what we would say.”

The labor secretary also relayed conversations he’s had with union leaders since taking office.

“I think it’s less, ‘what’s the relationship with unions,’ than, ‘on what issues do we agree.’” On issues such as infrastructure and trade, “this administration and many unions are going to have similar positions,” the secretary said. On immigration and “on some other issues—my guess for example, on overtime—the overlap may be substantially less.”

His comments come as the DOL is in the midst of reviewing public comments that will frame a likely rewrite of a controversial Obama administration rule designed to expand time-and-a-half overtime pay access to an estimated 4.2 million workers. Acosta has suggested that he’d prefer a regulation that doesn’t “create a shock to the system” for employers, meaning it wouldn’t make as many new employees eligible for overtime.

The White House has shared more common ground with unions on efforts to reconsider trade deals to bring back more jobs that were lost overseas. An infrastructure package to potentially create more construction and manufacturing jobs would also please unions, but a specific proposal hasn’t been rolled out to date.

Acosta brings a reputation for keeping an open mind when listening to union and management concerns. But a continued rollback of Obama-era workplace rules that were backed by the labor movement could widen the rift between the secretary and the unions that are key stakeholders to the department.

The DOL’s Office of Labor-Management Standards has announced plans to reinstate a task force from the George W. Bush administration that was created to audit financial disclosures of national and international unions. The initiative is explained as an attempt to improve transparency and ensure union democracy, but some in the labor movement perceive it as a form of union harassment.

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com; Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Terence Hyland at thyland@bna.com

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


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