Economic News

Sanders Set to Introduce Senate Bill Aimed at Gig Economy Employers

In recent years, many American workers have ditched their traditional 9 to 5 jobs and become members of the so-called “gig economy.” The term — which usually calls to mind services like Uber, Lyft, TaskRabbit and others — has been used to describe the phenomenon of workers taking on new types of jobs as independent contractors, with most “gigs” serving as short term employement. Proponents of the movement point to how this new paradigm allows workers to monetize their skills and assets while also granting them schedule and lifestyle flexibility. However it seems not everyone is on board with the gig economy revolution or what it means for worker protection.

As Bloomberg reports, Senator and former Presidential hopefully Bernie Sanders is set to introduce a new bill that, among other things, would extend certain labor protections to independent contractors. This would include the ability for workers to prove they should actually be classified as employees and allow them to unionize. The proposed legislation would also overwrite right-to-work bills currently in effect or on the ballot in several states. In addition to being backed by top unions, many Democratic Senators — including Elizabeth Warren, Kamala Harris, and Sherrod Brown — have also voiced support for the idea.

Striking a tone similar to the one he maintained during his 2016 presidential campaign, Sanders said in an interview this week, “Innovation is great, but you need an economy that works for ordinary people, not just the 1%.” From that statement, it’s probably safe to assume that Sanders is aiming this legislation at the Ubers and Lyfts of the world that rely mostly on independent contractors to make up their labor force. Given this classification, drivers are not entitled to the benefits that employees would be. As a result some lawmakers and other critics have suggested such gig economy operations spur a “race to the bottom.”

Sanders’ proposed bill also comes on the heels of a recent California Supreme Court ruling that took up a very similar issue. In this case, the court looked at Dynamex’s independent contractor workforce and determined they should actually be qualified as employees — thus entitling them to additional protections. As part of their ruling, they stated that — among other factors — a worker classified as an independent contractor “performs work that is outside the usual course of the hiring entity’s business.” That standard could have major implications for ride-share companies, as former National Labor Relations Board chair Wilma Liebman explained to Bloomberg. “Uber and Lyft are transportation companies. The drivers are obviously providing the transportation services that Uber and Lyft offer the public,” she said. However Uber has previously argued that they are an online service provider and technology company, not a transportation company.

While Senate Democrats may have a hard time getting such legislation enacted as long as President Trump in office, the support for Sanders’ bill coupled with the recent California court decision could signal a tough road ahead for some gig economy businesses. Moreover, despite most Americans associating the gig economy with Silicon Valley, there are several other companies that utilize independent contractors that could also find themselves under scrutiny. With midterms just around the corner and another presidential race just a couple of years away, expect worker’s rights, unions, and right-to-work to be hot topics on both sides.

Other Articles by Jonathan Dyer