The Shoe Is About to Drop for the Platform Economy: Understanding the Current Worker Classification Landscape in Preparation for a Changed World

Authors

Samantha J. Prince

Abstract

Whether a worker is an independent contractor or employee is of great significance in many countries, including the United States. This label drives whether a worker is entitled to many protections and ben-efits, including minimum wage, overtime, workers’ compensation, un-employment compensation, anti-discrimination protection, NLRA pro-tection, and more. The difficulty inherent in accurately classifying workers as either independent contractors or employees cannot be overstated. First, there are so many tests spanning all levels of our government. Second, there are so many ways that people work, and with the increased popularity of app-based work, classification be-comes even more difficult. Simply, some of the tests have not been working well when applied to precarious app-based work. As a result, policymakers are forced to finally bring these issues to the forefront. Worldwide policymakers and leaders are implementing changes to protect app-based workers. In the United States, the federal govern-ment is evaluating whether these changes in the workforce require changes in national labor and tax laws. While campaigning, President Biden pledged to establish a uniform worker classification test for pur-poses of all federal labor, employment, and tax laws. Subnational gov-ernments— states and cities—are also evaluating and making changes in their policies and laws. To make these decisions, policymakers will need to be familiar with the current landscape of tests and statutes. Policymakers should evaluate the approaches that currently are being used and how they have fared so that they can decide whether to strike out with a novel test or adopt one already in use. Although prior articles have consid-ered worker classification laws, and the benefits associated with vari-ous classification approaches, things have evolved so quickly that in some respects most of those articles are at least partially out of date. And having all of this information in one place is critical for ease in policymaking research and deliberations. This Article fills the current knowledge gap by providing an up-to-date compendium of the current state of worker classification laws. The Article starts with a segment on instabilities and health issues ex-perienced by app-based workers. Then it covers the latest on worker classification laws around the world including the EU Commission's Proposed Directive. It then turns to tests that the U.S. is using, which include traditional tests and new tests from both the state and city lev-els. The Article explains how these tests are used and summarizes com-mentary about the strengths and weaknesses of each of these tests. As national, state, and local policymakers consider how best to move for-ward in regulating the app-based economy and its workers, they are likely to find the information in this Article useful to their deliberations.

Recommended Citation

Prince, Samantha J. (2022) "The Shoe Is About to Drop for the Platform Economy: Understanding the Current Worker Classification Landscape in Preparation for a Changed World," University of Memphis Law Review: Vol. 52: Iss. 3, Article 3.
Available at: https://digitalcommons.memphis.edu/um-law-review/vol52/iss3/3