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October 31, 2023 HUMAN RIGHTS

The Work of the Future: Ending Employment Misclassification

by Miriam A. Cherry

During the last decade, technology has contributed to widespread and significant changes not only in how work is performed but also in the structure of work itself. In only the past few decades, entirely new career paths and ways of working have been created. From rideshare to crowdsourcing, digital labor platforms have created new markets for labor that previously did not exist, matching customers and service providers. Work is more global than ever before, and many people work in a completely online environment. During the pandemic, remote work allowed companies and workers to manage health and safety concerns, with praise for the additional flexibility work from home afforded workers. These accelerated changes, however, have had serious consequences, and, in some instances, they have been used to undermine worker protections and benefits. The most significant cautionary tale concerns the gig economy. In the last decade, digital labor platforms have tried to opt out of the labor and employment laws, created legal uncertainty, and raised concerns that such efforts could undermine labor protections for workers more generally. The trend toward the informalization of work has a serious negative impact on gig workers and their families, who do not receive the accustomed benefits or protections that workers in the traditional economy currently receive.

With the rise of the platform economy, courts, policymakers, and voters around the United States and the world have all been grappling with the question of whether gig workers are employees or independent contractors. Employees are typically seen as dependent and have little bargaining power, whereas independent contractors are seen as savvy business owners who can stand up for themselves and set their own rules. This division in the law is ancient and traces back to Roman law, where one could contract for time worked (location operarurm) or a specified result (location operis). This longstanding bifurcation has major implications for worker rights, as employee status is an important gateway for receiving the protection of labor and employment laws. In most parts of the world, only employees can organize and bargain collectively in a union; enforce minimum wage and hour laws; be eligible for the protection of workplace safety laws; bring claims for employment discrimination; and be eligible for unemployment insurance.

Gig work, however, has challenged this binary divide. Traditionally, classification as an employee depended on multiple factors focused on control over how work is performed. Gig work, however, promised that jobs would come to workers over their cellphones that could be done at the workers’ convenience. Over the years, however, gig workers have been accorded less scheduling flexibility. Most digital labor platforms use GPS or other tracking software. Platforms implemented these systems to make matches and provide timely service, but they also have resulted in de facto worker surveillance. Both crowd work and location-based gig work also rely on customer ratings in order to evaluate the quality of the work provided, often down to the most minute detail of how the work is performed. 

Gig work promised that jobs would come to workers over their cellphones that could be done at the workers’ convenience.

Gig work promised that jobs would come to workers over their cellphones that could be done at the workers’ convenience.


More recently, many platforms have begun to push workers toward sustained hours akin to shift work. There are practical reasons for this. For example, rideshare platforms want to ensure that there are drivers on the road when customers need them. As such, drivers on these platforms cannot count on earning adequate income unless they work at the specified times. Platforms accomplish the move toward shift work through a mix of incentives, like surge pricing, along with the gamification of work, like fun graphics or bonuses, which give workers a sense of accomplishment for driving particular hours or meeting other of the platforms’ goals. As such, there are significant limits on the flexibility that platforms offer workers despite their marketing.

Over the years, the hybrid nature of gig work has led to widespread confusion and litigation. Famously, in 2016, two misclassification cases pending in the Northern District of California settled for approximately $100 million but never resolved the employment status issue. What followed was a torrent of lobbying, reforms, retrenchment, and counter-reforms in the state of California. Sometimes referred to as the “Gig Battles” of California, the state Supreme Court, the legislature, and the voters all weighed in on the matter of gig worker classification. In 2019, the California Assembly passed AB5, which contained the ABC test, an expansive new test for employee status that had the effect of classifying gig workers as employees. In response, several digital labor platforms threatened to cease operations in California. Platforms also spent $200 million to lobby for the new ballot initiative, which at that time was the most money that had ever been spent on a ballot initiative. Platform-backed Proposition 22 received approval from California voters in November 2022, and gig workers were stripped of their employee status.

Instead, Proposition 22 created an intermediate category situated between employees and independent contractors specifically crafted for gig workers. Known as an “independent contractor plus” model, this hybrid category was the first of its kind in the United States. Workers in the intermediate category received some, but not all, of the rights employees had. California’s intermediate category included eligibility for unemployment insurance, the ability to sue in state court for employment discrimination, and a health benefit that drivers could access—provided they met certain requirements. However, there were limitations. The initiative prevented workers from joining a union or bargaining collectively. Proposition 22 also limited the California legislature from overturning its provision unless there was a 7/8 vote of the legislature, requiring near unanimity. After the passage of Proposition 22, gig workers and the Service Employees International Union brought a constitutional challenge to Proposition 22, which is currently on appeal to the California Supreme Court. Essentially, the challenge argues that the near unanimous vote preempts the legislative branch from regulating labor, a right allocated exclusively to the legislature in the state constitution.

Almost three years later, the state of play has resulted in dismal outcomes for California gig workers. For example, data from the Drivers Seat Cooperative app shows wages for rideshare drivers falling after the passage of Proposition 22. While typically minimum wages are calculated based on the number of total hours a worker spends performing the job, the apps only pay drivers for the time actively spent driving. With uncompensated waiting time factored in, the wages for drivers often would dip below the state minimum wage of $15 an hour. Further, many drivers have been unaware of the existence of health subsidies. Other drivers have applied for health subsidies but have failed to meet the requirements like sustained hours of active driving on the app over a period of time. While the constitutional challenge is pending in California, the system for filing claims for employment discrimination is in limbo. In fact, claims for wrongful deactivation, employment discrimination, and other complaints by gig workers are often shunted into arbitration proceedings, per the clickwrap terms of service that drivers click “I agree” to when they start working on the platforms. Despite these poor outcomes, a similar “independent contractor plus” model has passed and gone into effect in Washington state. Such a model is also being considered in several other states that have more progressive labor and employment laws.

While understanding that some rights for workers are arguably better than none, California’s experience shows that there are serious flaws with the independent contractor plus category. As noted above, many workers do not understand how to access their new benefits. Of the laws that do apply, such as those laws protecting against employment discrimination, they appear to be under-enforced—or not enforced at all—for gig workers. Meanwhile, because of the ballot initiative, many California voters think that the problems of working conditions in the gig economy have already been solved. In reality, the intermediate category has only led to confusion and an overall reduction in benefits for California gig workers from their brief time with employee status under AB5.

We need to learn from the lessons of California and refrain from viewing an intermediate employment category as a panacea. Rather, reflecting on the purposes of the laws, we could ask: Why shouldn’t gig workers receive these protections? Should workers not be paid a living wage? Should workers not be able to report employment discrimination? Or should workers be banned from unionizing just because they use a website or app to log in to work? Once we start to analyze the reasoning behind taking gig worker rights away, they seem problematic. Further, when we think about the changes that happened during the pandemic and how gig work became essential, these distinctions make even less sense. With remote work, many workers in the traditional economy used computer-mediated work for the first time. But that did not, and should not, mean that they would lose part or all of their rights. And during the 2020 pandemic, gig workers showed up and risked their health and safety so that others could stay home and be protected from the coronavirus. If they were essential workers then, gig workers should be treated the same as other workers now.

Further, this informalization of work has deeper implications for other parts of the labor market. Platform companies have shown that with enough audacity, a willingness to “move fast and break things,” and enough lobbying clout, specialized exemptions can be found. That is a dangerous precedent, in a time when many workers are struggling with rising costs of living and the specter of generative artificial intelligence based on large language models.

In these times of uncertainty, policymakers and judges need to reflect on the goals of the labor movement. For gig workers to attain parity and to shore up labor rights, income security, worker protections, and benefits for all who work are needed.

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Miriam A. Cherry

Professor of Law and Faculty Director of the Labor and Employment Law Center at St. John's University Law School

Miriam A. Cherry is a professor of law and the faculty director of the Labor and Employment Law Center at St. John’s University Law School in New York City. She is the author of Work in the Digital Age: A Coursebook on Labor, Technology, and Regulation (Aspen/Wolters Kluwer 2021).