July 08, 2020 Feature

Workers’ Compensation, Nonstandard Work, and Workers Laboring in the Gig

By David B. Torrey
VectorMoon/iStock/Getty Images Plus

VectorMoon/iStock/Getty Images Plus

Workers’ compensation lawyers can look to cases decided under the FLSA for guidance in assessing claims filed by workers injured while laboring in the gig.

Individuals laboring in “nonstandard work”—temporary/staffing company workers, “gig”1 workforce actors like Uber and Grubhub drivers, and other freelancers—are a population on the rise.2 This growth in the number of nonstandard workers, and the correlative phenomenon of businesses aggressively classifying their workers as independent contractors,3 has been ascribed to at least three factors: (1) enhanced competition due to globalization, (2) pressure from investors (capital markets) for corporations to concentrate on “core competencies” and maximize profits, and (3) the revolution in information and communications technology.4 Many commentators, in a nod to the enhanced competition factor, also ascribe the growing use of independent contractors to firms’ desire to avoid burdensome regulations that attach when workers are classified as employees.5

The growth of nonstandard work is apparent in the realm of workers’ compensation law (and the related field of health and safety). As examples, legislatures and agencies have taken action against widespread misclassification of employees as contractors;6 the Occupational Safety and Health Administration (OSHA) has promulgated a rule to leverage safe work practices when the contracting-out phenomenon results in multiple employers being present on a single work site;7 and regulators in the state of Alaska at one time advised Uber, proactively, that the state considered Uber’s drivers to be employees for workers’ compensation purposes8—although, notably, the Alaska legislature reversed that position in 2017.9

This article discusses the issue of nonstandard work, workers in the gig (that is, those laboring through app-based intermediaries), and the workers’ compensation doctrine. After presenting a brief background of the employee/independent contractor issue in workers’ compensation law, the article analyzes the phenomenon of nonstandard work, with a focus on how many workers are engaged in nonstandard work, what type of labor is implicated, and the health and safety concerns surrounding such work. Next, the article examines the nature of various nonstandard employment arrangements, and then reviews the standard tests typically used in the workers’ compensation context in distinguishing independent contractors from employees. Finally, the article reports on recent statutory developments specifically in the realm of the gig, and reviews the most dramatic recent development in this area: the California legislature’s enactment of Assembly Bill 5 (AB 5) and its embrace of the “ABC” test.

Background

The employee/independent contractor issue is an old one in workers’ compensation law. For years, certain employers have sought to misclassify workers, and lawyers and judges have long engaged in litigation over the issue in work-injury cases. Notably, for decades, Larson’s Workers’ Compensation Law has featured a chapter entitled “Deliberate Avoidance of Employment Relation.”10

Cases of questionable independent contracting and troublesome work in the gig include the following:

  1. A business enterprise, which previously utilized its own employees, instead retained an employee leasing firm to “lease” to the enterprise its own workers. A worker thereafter sustained an injury, the employee leasing firm was uninsured and insolvent, and a dispute over employer identity and insurance responsibility ensued.11
  2. A business contracted out an integral aspect of its work; the subcontractor failed to insure; a worker was injured; and a complex, decade-long workers’ compensation action unfolded, involving the Uninsured Employers Guaranty Fund. The case generated significant disruption for multiple parties, extensive litigation, and potential tort and “statutory employment” liability.12
  3. A worker, laboring as an independent contractor via an app-based intermediary, sustained a fatal injury in the course of his employment. This left the worker’s family with no apparent workers’ compensation—and no remedy.13

As these examples show, the rise of nonstandard work presents multiple challenges for workers’ compensation. These challenges exist in both theory and in practice.

In the realm of theory, an increased number of workers who are laboring as independent contractors means that (1) fewer have the status of employees who are covered by social insurance to protect against the risk of work-induced disability, (2) the costs of work injuries that would have been internalized are shifted to the worker or society as a whole,14 and (3) fewer are laboring in workplaces where employers are subject to the financial incentive of operating safely.15

In the realm of practice, the rise of workers laboring in the gig, or otherwise as independent contractors, raises the question of where these workers are to turn when they sustain work injuries. Despite their classification as independent, they still may be employees in the eyes of workers’ compensation law and have cognizable claims. In the alternative, injured workers may have cognizable remedies against their employers in tort. Meanwhile, drivers for Uber and Lyft often seem to believe that their injuries will be covered by their personal auto policies, but this belief seems questionable.

Overview of Nonstandard Work

Quantification. Numerous sources have quantified the number of workers laboring in the various sectors of nonstandard work, but these numbers are not always perfectly established. Dr. John Howard, director of the National Institute for Occupational Safety and Health (NIOSH), reported that his agency, in 2013, found that 18.7 percent of adults worked in nonstandard arrangements. Most of these workers were in the temporary/staffing categories. As to true gig workforce workers, the number was “very small”: “Workers who provide services through online intermediaries make up less than one percent of the workplace.”16

A 2017 media account announced, improbably, that the “gig economy . . . is now estimated to be about 34% of the workforce,”17 but an examination of the source of this statement shows that the figure refers not only to true gig workforce members but also to temporaries and subcontracted labor. A 2019 industry article complained that “[t]he government has no idea how many gig workers there are, and that’s a problem.”18

Speakers at a 2020 Pittsburgh CLE presented statistics indicating that in 2019, 35 percent of American workers engaged in work as independent contractors, a reported increase of four million since 2014. They also presented IRS statistics showing that in the vast majority of states, the percentage of growth of new workers in the independent contractor classification far exceeded that of new workers in the employee category.19

Thus, accounts of how many workers labor in the various categories of nonstandard work can vary widely. On this point, Howard noted that “there is no single taxonomy to uniformly describe standard and nonstandard work arrangements . . . , making occupational health and safety surveillance and research challenging.”20

Independent contractors and workers’ compensation. Types of jobs that are often contracted out in the present day (in contrast with the past) include security work, housekeeping, grounds maintenance, and wholesale/retail material logistics. The rise of subcontracting in these four fields has been well-documented in The Fissured Workplace, a comprehensive 2014 book by Professor David Weil.

Of course, workers’ compensation law has dealt with subcontracting in the trucking industry for decades, and analyzing relationships for employment/independent contractor status is hardly new.21 Perhaps the most common type of dispute requiring such analysis presents after a small construction company retains a construction worker as an independent contractor, a significant period of work follows, and then an injury occurs. The judge must determine whether the worker really is an independent contractor or, instead, an employee.22

Misclassification and its discontents thus have long been an issue for workers’ compensation, and, as noted, the leading national treatise (Larson’s Workers’ Compensation Law) actually devotes an entire chapter to the same. What is new, Weil explained, is (1) the volume of jobs that are arranged, in the present day, in this fashion; and (2) the perverse, or at least unfortunate, result that the highly leveraged bottom tier of subcontractors can be inattentive or oblivious with regard to such basics as workplace safety and securing insurance coverage.23

The gig and competing social critiques. With regard to workers in the gig, analyzing the specific numbers can be a special challenge. For example, occupational health physicians seeking to analyze health and safety concerns remarked:

Many work for more than one platform, patching together a living via multiple gigs, and others perform gig work in addition to holding a traditional-economy job. A recent survey found over 40% of on-demand workers work for two or more companies in a given week, and one in seven work for three or more companies.24

Other jobs referenced in discussions of nonstandard work are those of the true “freelancers.” These workers (not believed to be a large part of the workforce) include artisans selling crafts online and/or in their own locality.25

When considering true gig work, the largest enterprises include Uber and Lyft (transportation, often termed “transportation networking companies”); Handy and TaskRabbit (home services, often called “marketplace contractors”); and Postmates (food and merchandise delivery). Grubhub (restaurant food delivery), another app-based enterprise, has become well-known in the legal community in light of a February 2018 federal court decision in which one of its drivers was unsuccessful in proving that he was an employee—instead, he was held to be an independent contractor.26 Grubhub now has a competitor, Uber Eats, in this category; indeed, some McDonald’s franchisees now advertise Uber Eats as their exclusive delivery service. Care.com, meanwhile, facilitates workers for childcare, senior care, and pet care.

A widely disseminated white paper that suggests “independent worker” as a new categorization (beyond employee and independent contractor) for gig workers features a thorough appendix describing a number of prominent online intermediary companies. Among these are Instacart (shopping and delivery from stores such as Costco) and Thumbtack (an “online marketplace for services,” such as wall painting and wedding officiating).27

A debate exists over whether those who labor in the gig are being taken advantage of. Two competing social critiques are evident. One critique of the contracting-out aspect of the gig workforce centers on a concern over unfair distribution of wealth: specifically, that intermediaries, benefited by information and communication innovations, become enriched while the subcontracted individuals who actually do the work are left with depressed pay, imperiled occupational health, and lack of traditional social protections—like workers’ compensation—that are linked to employment. For example, a 2017 editorial admonished that “to the extent that most gig platforms concentrate wealth into the hands of the very few while driving down wages through direct competition, the resultant increase in income inequality itself fuels health disparities, while depriving the individual workers of [a] meaningful voice.”28 In this same spirit, Professor Colin Crouch declared that “the gig is just one form taken by a far more extensive, general attempt by firms, neoliberal thinkers and public policy-makers to free employers of responsibilities to those who work for them while retaining if not intensifying the dependence of those workers on the firms.”29 And, he submitted, “[t]he appropriate term to describe the position of all such workers is ‘precarious.’”30

Competing with this critique are the comments from at least some Uber drivers who say that they enjoy the flexibility of their jobs—enabled, in this regard, to work when and as they please. Others also have written about the virtues of freelancing and corresponding control over their own work. For example, in a 2016 essay, a historian challenged the common wisdom and suggested that many workers enjoy the freedom that labor in the gig workforce has brought.31 He asserted that the current and developing landscape of work “resulted not simply from economic dictates but also from cultural forces that encourage people to imagine and pursue new ways of work.”32 The historian invoked the 1974 book by Studs Terkel, Working, in which a series of workers complain of the deadening effects of the eight-hour workday and the boredom of regimented office and factory life. In the present day, “across the precarious economy, workers identify control over their work and non-work time as a signal virtue.”33

While this may be true, how such workers insure for the risk of work injuries and the disability that may follow is not always obvious. Certainly, commercial policies, Social Security Disability, and Supplemental Security Income, for those qualified, are imperfect remedies. None are for the temporarily disabled. Only workers’ compensation affords such a remedy.34

Health and Safety Concerns

Many nonstandard jobs consist of labor work, wherein workers bear a significant risk of injury. Workers doing housekeeping, grounds maintenance, loading and unloading of trucks, and home health are all frequent applicants for workers’ compensation. The risk of injury to workers in the labor category who have been contracted out is higher than in conventional employment.35

Temp-worker status. Evidence exists that temporary workers have a higher incidence of injury than permanent employees.36 Their experience likely can be attributed to the highly intermittent work of on-demand workers. Dr. John Ruser, head of the Workers’ Compensation Research Institute (WCRI), summarized the likely reasons that temporary workers are subject to this phenomenon:

  • Less experience and familiarity with operations due to their short tenure at the work site
  • Lack of close relationships with longer-term workers who could help navigate work site hazards
  • Fewer hours of safety training relevant to the specific job assigned
  • More hazardous work assigned to temporary workers and outsourced to independent contractors
  • Less likely to report unsafe conditions
  • Supervisory lines and responsibility for occupational safety and health become blurred37

Furthermore, varying work locations and flexible work schedules—hallmarks of gig workforce labor as well—can pose significant risks. Ruser reported that nontraditional work sites may be less safe because they lack commonplace safety controls and can fall outside the scope of OSHA oversight. Nontraditional work hours, meanwhile, may be less safe due to worker fatigue and unsatisfactory work conditions such as poor lighting.38

New employment. Another researcher, Dr. David Michaels, stressed that new workers in particular are at a greatly increased risk of injury. He emphasized that this fact has been known for years and cited as an example a 1918 study of the “metal trades” (iron and steel machining) that showed that press hands and similar workers experienced a “very great excess of accident occurrence on the first day on the machine.”39

Multiple-employer sites. Both Michaels and Weil also stressed that workers are at an increased risk of harm when multiple employers are at work on the same industrial site.40 Lack of coordination and desultory attention to safety often can unfold in such situations. Howard, NIOSH director, commented on this issue as well:

A blended workforce can pose challenges for safety managers. Temporary and permanent employees may differ in the training they receive for the job, the protective equipment they are provided, the dangers associated with the tasks they are assigned, and their perception of safety practices. . . . Perception of the organizational culture, including safety climate, may not be uniform across standard and nonstandard work arrangements. To account for this, safety managers need to take employee heterogeneity into account when developing workplace safety practices. . . .

Some host or client employers incorrectly behave as if they do not share safety and health responsibilities to protect temporary agency and leased workers in their workplaces. Rather, they act as if the safety and health responsibilities for workers lie with the agency or with the employee leasing company. OSHA has historically relied upon its multi-employer citation policy to ensure shared safety and health responsibilities to protect all workers at a site.41

Gig workplace. With regard to workers laboring in the true gig workforce (that is, via intermediaries), occupational health physicians posited that “[h]ealth and safety risks could be anticipated to be worse in gig work because of the loss of the protective effect of working in a public workplace, as much gig work is transacted in private automobiles or homes.”42 Meanwhile, gig workers are “generally younger” than those laboring in standard work, and “younger age is a well-known independent risk factor for occupational injury.”43

The archetypical gig workforce worker, the Uber or Lyft driver, seems particularly at risk, as are delivery drivers: “Even among professional, trained drivers, transportation is a dangerous field—it is unknown how much more so it will be for non-professional drivers and for other drivers and pedestrians encountering these untrained-drivers-on-a-schedule.”44

Indeed, the ubiquitous drivers of Uber and Lyft find themselves at risk of motor vehicle accidents and, given their interface with the public, assaults. A group sympathetic to workers, the National Employment Law Project (NELP), noted that on-demand jobs are among the most dangerous in the nation, with most work focused on transportation, delivery, and home services—well-known as traditionally hazardous industries. The largest segment of on-demand work, for-hire transportation, proves to be particularly dangerous. Statistically, taxi drivers are killed on the job at a rate five times higher than the average for all other workers and face a risk of homicide over 20 times greater than for other workers. These drivers often work with cash, alone and in isolated areas, at night, in high-crime areas, and with people under the influence of alcohol. Taxi drivers also suffer an increased risk of musculoskeletal injuries, including back and neck injuries from handling passenger luggage and spending long hours behind the wheel.45

One commentator pointed out that the murders of two Uber drivers in 2017 caused “all eyes [to be] fixated on the gig economy and worker safety.”46 An employment law specialist, writing in 2019, joined in the earlier commentary and remarked:

Gig workers often transport or perform in-home projects for complete strangers, who, in some situations[,] may not be thinking clearly. The exposure gig workers have to the public understandably makes violence-related issues one of the more recognized safety concerns. It’s only a matter of time before aggressive plaintiffs’ attorneys find a viable avenue to hold companies liable for injuries to gig workers.47

Workers in other segments of the gig economy are also at risk. For example, workers engaged in on-demand domestic work perform hazardous tasks. A national survey found that 38 percent of these workers had suffered work-related wrist, shoulder, elbow, or hip pain in the prior 12 months. Furthermore, a study of bike messengers in Boston found that 70 percent had suffered an injury resulting in medical attention or lost work.48 For instance, in November 2017, a bicyclist delivering groceries for an app-based delivery service in Boston was struck and killed by a dump truck in the midst of his work. According to an account of this tragedy, “[b]ecause of [the bicyclist’s] status as an independent contractor, his estate was not eligible for any kind of workers’ compensation benefits. Unable to pay for his funeral, his family started a GoFundMe page to help with expenses.”49

Classifications of Nonstandard Work

Howard, NIOSH director, identified as “standard work” two familiar patterns of labor. The first, which he called the “industrial model,” is the full-time work, in both the manufacturing and service sectors, that has most recently predominated in society—that is, the nine-to-five process of workers laboring with an employer for an indefinite period of time. Control by the employing enterprise is usually clear in such situations. The second, which he called the “craft model,” is the work undertaken (typically) by skilled tradesmen laboring out of union halls for select employers, typically for finite periods. In this model, “[w]hen the project ends, so does the worker’s employment.”50 (Howard further remarked that, “[i]n many ways, the new nonstandard work arrangements look more like the ‘craft’ model, and less like the industrial model.”)51

When a worker in either of these standard work categories is arbitrarily reclassified as an independent contractor, the workers’ compensation law in most states immediately will analyze the relationship to ascertain whether the alleged employer has retained control, or the right to control, the worker’s work. If such control is retained, the determination that the worker is an employee usually unfolds with ease. The phenomenon of deliberate avoidance of the employment relation, usually on the part of the business enterprise, is a century-long phenomenon.

The more contemporary phenomenon is the remarkable growth of nonstandard work, which encompasses five basic categories. The first two categories include those working through a temporary/staffing agency or laboring under the auspices of a professional employer organization (PEO) (also known as an employee leasing entity); in these situations, employment status can become ambiguous, but employers and courts rarely deny that the injured worker was the employee of some enterprise. The third category involves those freelancing in their own full- or part-time enterprise (with a long-standing pattern of work). The fourth category encompasses the workers of franchisees: as with workers laboring via temporary agencies, they are usually considered employees, but their potential conceptualization as having an employment relationship with franchisors has been an issue in the author’s state and elsewhere. The final category includes those working in the true gig workforce, i.e., labor via platform intermediaries in the new sharing economy. The following subsections detail aspects of each category of nonstandard work, with a focus on work injuries and potential compensation for the same.

Temporary/staffing company workers. The rise of the temporary worker in American business was recently recounted and analyzed in a book by Cornell professor Louis Hyman, Temp: How American Work, American Business, and the American Dream Became Temporary. According to Princeton University, the book

traces the history of the “gig economy” back to creation of the Manpower temp agency in the 1940s, whose founders framed temporary work as an opportunity for women to earn extra spending money with flexible scheduling. The book chronicles the use of temporary labor across different industries and geographic regions, including the Silicon Valley tech industry, which Hyman contends has always relied heavily on subcontractors employing temporary workers, starting with semiconductor manufacturing in the 1960s.52

Consistent with Weil’s assertions, Hyman asserted that management consultants’ “relentless focus on the lean, agile workforce [has] contributed to the nation’s increasing dependence on temporary labor.”53

For purposes of this article, of course, the issue is responsibility for compensation in the event that such workers sustain work-related injuries. On this point, no per se rule seems to exist with regard to whether an individual who is first retained by a temporary agency remains an employee of the agency, as opposed to an employee of the temporary employer, when suffering a work injury. The control test is typically applicable. Specific provisos of a state workers’ compensation law also must be consulted to ascertain whether regulations have been enacted. In examining such statutes, it is important to understand the difference between workers laboring through temporary agencies and workers laboring under the auspices of a PEO arrangement; the two enterprises typically are subject to different regulation. (PEOs are discussed in the next subsection.)

As a practical matter, most temporary agencies will cover the issue of responsibility for workers’ compensation in the contract with their clients; a sales pitch of such agencies is that they provide compensation coverage, thus relieving the temporary employer of potential liability. However, a court may look through this agreement to make an independent determination of whether the worker remains under the control of the agency or is considered a borrowed servant.

The final analysis in most states is likely one based on this law of borrowed servants, which the Larson treatise calls the law of “lent employees.” Under this analysis:

When a general employer [the temp agency] lends an employee to a special employer [the client or actual place of labor] the special employer becomes liable for workmen’s compensation only if:

(a) the employee has made a contract of hire, express or implied, with the special employer;

(b) the work being done is essentially that of the special employer; and

(c) the special employer has the right to control the details of the work.

When all three of the above conditions are satisfied in relation to both employers, both employers are liable for workmen’s compensation.54

A leading, mainstream case from Pennsylvania illustrates this type of analysis, though criterion (a) is inapplicable.55 In that 1996 case, the claimant was a temporary who had first obtained work through JFC Temps. JFC hired him and assigned him to G&B, a warehousing company, to drive a tractor trailer. While exiting a G&B truck, he slipped and fell. The claimant thereafter filed a claim petition seeking compensation from JFC. JFC joined G&B as an additional defendant. The trial judge concluded that JFC was the responsible entity, but the Pennsylvania Supreme Court reversed. Instead, G&B was found to be the responsible employer because G&B controlled the worker’s labor. The court, notably, declined to establish a broad rule “that a temporary employment agency should never be the employer responsible for paying workers’ compensation benefits” and concluded instead that the better approach was to examine the circumstances of each case based principally on the control test.56

This decision implicates other remedies. For example, in Pennsylvania, when the worker is dispatched by a temporary agency to the agency client and an injury occurs, the client maintains workers’ compensation immunity—and this is so even if the agency has provided the workers’ compensation insurance.57 In addition, the temporary agency itself is entitled to such immunity.58 The law on these fine points may vary among jurisdictions, but the author believes that Pennsylvania reflects the majority rule.

Vocational rehabilitation and the transition back to work processes for the injured temporary worker are major challenges. Most temporary services, by their very nature, are not in the light-duty business. In a state like Pennsylvania, which has no vocational rehabilitation benefit, effective return-to-work processes in the temporary employment context are nearly impossible.

PEO employees. Employment arrangements exist whereby a worker is nominally considered the employee of a PEO, also called an employee leasing firm. This type of firm is typically a noncapitalized entity that hires the employees of a company (its “client”) and then leases them back to the company. The employee leasing firm handles such things as payroll, tax deductions, and the securing of workers’ compensation coverage.59

Such employment constructs may give rise to confusion as to the party properly to be considered the injured worker’s employer. This confusion can lead, in turn, to disputes over the existence of workers’ compensation coverage. Under employee leasing arrangements, the employee leasing enterprise is typically considered the nominal employer or “coemployer”; but, were a dispute to develop, courts would use the control test to govern the borrowing employer and temporary agency analyses to assign liability. In most (perhaps all) cases, of course, the client of the employee leasing entity controls the details of the work; and if this is indeed the case, the client, and not the employee leasing entity, would be considered the employer.

During the 1990s and 2000s, PEOs became popular as a cost-savings device for businesses. However, the industry seemed to be underregulated, and many such enterprises did not carry the promised workers’ compensation coverage. An injury would occur, the PEO would declare bankruptcy (or simply disappear), and the PEO client was typically held liable for workers’ compensation. In some states, courts held that employers who were subject to such defaults in coverage by PEOs could be sued in tort.60

Many states now regulate the operation of PEOs, and the National Association of Insurance Commissioners maintains protocols on how insurance is to be written in the industry.61

Freelancers. Work as a freelancer or individual entrepreneur is not a new phenomenon. True freelancers, that is, self-employed individuals, traditionally have been on their own in terms of securing medical and disability insurance, although they are obliged to pay into Social Security.

Innovations in technology have reportedly empowered many individuals to work in home-based crafts and other minor manufacturing enterprises in their home offices and then market them via platforms like Etsy. According to one writer, “The use of mass-market 3D printing technology will create an army of back bedroom manufacturers,” with attendant insurance and liability challenges.62

Some bona fide freelancers use platforms to become “taskers,” via enterprises like TaskRabbit, and undertake home repairs, painting, and similar jobs. The Pennsylvania Workers’ Compensation Act speaks, at least in part, to this type of work: workers laboring at personal residences (which seems to be the typical scenario) do not thereby become employees of their clients. This is so because casual workers (that is, those who perform intermittent work only) not laboring in the regular business of the putative employer are excluded from the definition of “employee.”63 As a homeowner/client has no business in the first place, the tasker is statutorily excluded. This is likely the majority rule among states.

If it is true that service provision and even manufacture of home goods will continue to grow as a work phenomenon, other issues are implicated, in particular the issue of freelance workers in the gig becoming employers in their own right. For example, TaskRabbit does not restrict its taskers from utilizing assistants—though it requests that any such individuals also register on the app—so taskers themselves may be deemed employers for workers’ compensation purposes if they exert sufficient control. This particular dynamic of residential contracting work is no different from that which workers’ compensation has addressed for a century.

Workers of franchisees. Workers laboring for franchise operations are usually in the category of standard work. Still, scholars of the changing workplace have remarked on the growth of franchising operations—beyond the familiar example of restaurants and into such undertakings as janitorial work—and its effect on wage disbursements and other workplace practices.64 A particular point of criticism is that many franchisees can become highly leveraged and cash-strapped, leading to practices like shorting employees on their wages. And, of course, a common response to a company being leveraged is letting insurance lapse (or paying no attention to such responsibilities in the first place).

Under Pennsylvania law, such a scenario unfolded and tested the limits of the “statutory employer” concept, whereby the employees of a contracting enterprise that failed to insure became the employees, for workers’ compensation purposes, of the general contractor. In Saladworks, LLC v. WCAB (Gaudioso & UEGF), a Philadelphia franchisee of Saladworks had failed to insure, and its employee, having sustained an injury, was unable to secure workers’ compensation benefits from his employer.65 He instead sought to cast the franchisor as his statutory employer. While the appeals board accepted this argument, the Pennsylvania Commonwealth Court reversed. The court declared, somewhat ironically, that Saladworks, as the franchisor, “is not in the restaurant business or the business of selling salads.”66

Like the injured worker’s lawyer in the Saladworks case, a commentator argued that the “all-powerful brands—the franchisors” should be deemed employers for purposes of the Fair Labor Standards Act (FLSA) and National Labor Relations Act.67 She asserted that “franchisor brands, not their franchisees, set industry-wide standards [and thus] have a superior ability to offset rising wage inequality and to improve working conditions.”68 In particular, she suggested that franchisor influence over franchisees’ managers shows, in essence, an employment relationship.69

Under current thinking, this theory seems to be losing an uphill battle. Many efforts have been made over the years, in the tort liability context, to have franchisors be jointly or vicariously liable for the acts or omissions of their franchisees.70 Franchisor/defense interests who argue against such liability insist, in general, that the inevitable control exerted by franchisors “over their franchisees’ operations and procedures [must be] distinguished from day-to-day control over franchisees’ employees.”71 This advocacy seems to be successful in most cases and informs the workers’ compensation analysis.

Gig workers. Enterprises like Uber, Lyft, TaskRabbit, Handy, Grubhub, and Postmates deem workers undertaking labor via their respective applications to be independent contractors. This fact is patent from a review of the terms of service featured on their websites. For example, as of March 2020, the Uber terms of use stated: “No joint venture, partnership, employment, or agency relationship exists between you, Uber or any Third Party Provider as a result of this Agreement or use of the Services.”72 And, indeed, “[c]entral to Uber and Lyft’s business model is the classification of drivers as independent contractors, and itself as a technological platform to connect those drivers with passengers.”73 To effectuate this arrangement, most platform enterprises (not just Uber and Lyft) deny that they are in the transportation or home repair service business, instead portraying themselves merely as platforms to connect willing passengers or other clients with willing independent drivers or craftsmen.74

The Handy agreement is an example. The document features language absolving Handy as an employer and relieving itself of responsibility for workers’ compensation insurance:

Service Professional understands and intends that Service Professional will provide the services to Service Requesters strictly as an independently-owned and operated business enterprise, and not as an employee, worker, agent, joint venturer, partner or franchisee of Handy or any Service Requester for any purpose.

Handy and Service Professional acknowledge and agree that the Services are outside the usual course of Handy’s business and that the Services will be performed outside all of the places of Handy’s business. . . .

Handy will not be responsible for withholding or paying any income, payroll, Social Security, or other federal, state, or local taxes, making any insurance contributions, including unemployment or disability, or obtaining workers’ compensation insurance on Service Professional’s behalf.75

In terms of insurance, the Handy agreement shows the remarkable effort that the enterprise undertakes to avoid liability, including for workers’ compensation, specifically directing that the user is responsible for securing such policies:

It is the sole responsibility of the Service Professional to maintain in full force and effect commercial and general liability, adequate workers’ compensation (or, if permitted by law, occupational accident insurance), unemployment, liability, and other forms of insurance, in each case with insurers reasonably acceptable to Handy, with policy limits sufficient to protect and indemnify Handy and its affiliates . . . from any losses resulting from the conduct, acts, or omissions of Service Professional or Service Professional’s assistants, agents, contractors, servants, or employees. Service Professional shall, upon reasonable request, name Handy and its affiliates as additional insureds under the applicable policies and provide proof to Handy of such insurance before Service Professional provides any such services under this Agreement.76

Some say that the law has not caught up with the gig economy and that the full scope of “algorithmic wrongs” is not yet known.77 Yet, in the realm of workers’ compensation, tools are already available so that lawyers and judges can undertake the analysis of whether a worker, injured in the midst of labor for platforms, is entitled to benefits as an employee or excluded as an independent contractor. Those tools analyze the relationship for whether control exists on the part of the platform over the worker’s labor and, in certain states, whether the labor of the injured worker can be said to be integral to the platform’s business. Control seems to be the dominant criteria among states, but some jurisdictions, like New Jersey, give significant consideration to whether the worker’s labor is integral to the enterprise’s business purpose.78

As noted previously, the platform enterprises argue that they are merely marketplaces and are not otherwise engaged in some specific field of commerce. Some legal analysts are persuaded by this conceptualization,79 whereas others are not. A major dissenter is British law professor Jeremias Prassl, who argued:

To deliver tightly curated products and services to customers, gig-economy operators accurately shape the entire transaction by means of close control over their workforce[,] from setting terms and conditions and checking relevant qualifications, to insuring proper performance and payment. Gig-economy apps do not only make it quick and easy to find workers and tasks; user ratings also provide quality control and feedback, and digital payment systems render the entire transaction cashless. . . . [T]he reality of work is often a far cry from the freedom and independence of genuine entrepreneurship.80

Federal courts, entertaining FLSA claims against Uber and Grubhub, already have rendered adjudications where the factor of control guided the critical analysis.81 Those cases (see infra) will likely be persuasive authority, or at least guidance, for workers’ compensation adjudicators.

It seems doubtful that the appellate courts would apply the precedents addressing the employee/independent contractor dichotomy in a purely mechanical way. Courts also likely would reject the arguments of the sharing economy businesses that they are in essence passive intermediaries, no different from the entities that always have facilitated connections between parties. In this regard, scholars have observed:

While the sharing economy is new, the idea of sharing a resource is not. Rental markets for durable goods such as hotels, cars, and tools have been around for a long time, as have markets for personal services such as accounting, automotive repair, and singing lessons. What distinguishes the new sharing economy from the old is the appearance of the platform at the very heart of the transaction. What used to be a two-way transaction has become a three-way transaction.82

The “platform at the very heart of the transaction” is now a major player in economic and work relationships.

Another scholar posited, persuasively:

[T]echnology has completely changed the nature of sharing economies. . . . Despite its informal origins, the new sharing economy is largely driven by the for-profit motives of behemoth companies. In many instances, the new sharing economy is monetized and formalized even though the sharing-economy companies purport to serve as simple intermediaries. In reality, the companies’ involvement in the peer-to-peer transaction generally is more pronounced than in traditional sharing economies. And, even more significantly, these companies stand to make a substantial profit from the peer-to-peer transactions they facilitate.83

Most people, including judges, now understand these economic realities of the new sharing economy—and the circumstances of the individuals who labor in the gig workforce that it has created. This understanding will, presumably, guide them in the decision-making. In any event, as lawyers and judges further consider these cases, the following considerations seem important.

Unique facts of each case. As pointed out by Professor Michael Duff, in lieu of statutory authority, each legal claim of a true gig workforce laborer will have to be examined on its own facts.84

Still, as noted previously, the critical workers’ compensation analysis in Pennsylvania and likely most states will be whether the gig economy enterprise retains sufficient control relative to its workers’ labor. On this point, critical to the analysis will be a review of the contractual terms and conditions that the gig economy enterprise imposes on its potential workers as a condition precedent to their use of the enterprise’s app to obtain work.

Also critical to the overall analysis is the potential for tort liability on the part of the principal if employee status on the part of a true gig workforce member is not found. In this regard, independent contractors sustaining injury because of the negligence of their principal possess a potentially actionable tort suit.85

Arbitration clauses. A threshold issue is the import of the arbitration clauses that are ubiquitous in the contracts into which sharing economy businesses and their workers enter.86 Presumably, a true gig workforce member asserting an original claim will be met not only with a denial of employee status but also with an argument that the adjudicator has no jurisdiction to entertain the dispute in the first place.

True, virtually all state workers’ compensation laws invalidate preinjury agreements that restrict workers’ compensation rights, but Duff suggested that the Federal Arbitration Act (FAA) may be held to preempt the workers’ compensation authorities.87 (Most administrative adjudicators would hear such cases on the merits and leave it to the appellate courts to address such a novel jurisdictional argument.) It is also notable that some agreements, like that presented by TaskRabbit, exclude workers’ compensation claims from arbitration.88 The preferred view is, in fact, that the FAA does not preempt programs like workers’ compensation, which are reflective of exercises of state police powers.

Transportation network companies and litigation. Three federal court cases concerning transportation network companies and FLSA claims are educational in terms of how judges analyze workers’ compensation claims.

The 2016 O’Connor v. Uber Technologies, Inc. decision from California examined how Uber oversaw its drivers and concluded that a factual issue did indeed present itself with regard to whether sufficient control was exerted by Uber such that its drivers could be employees.89 The court in that FLSA case denied Uber’s motion for summary judgment. The court observed that various aspects of control were reflected in the operation. These included (1) the rule that Uber drivers could not tell passengers that they could be available for the next ride—instead, customers always were obliged to use the app; (2) the “suggestions” that drivers always be professionally attired and have jazz or NPR playing in the vehicle; (3) the protocol that the driver should always bring the vehicle right up to the passenger; (4) the ability to terminate the driver, essentially at will; and (5) the constant performance monitoring of drivers via analysis of customer rankings.90 With regard to this latter criterion, the court declared, “This level of monitoring, where drivers are potentially observable at all times, arguably gives Uber a tremendous amount of control over the ‘manner and means’ of its drivers’ performance.”91

Plainly, a state court entertaining a workers’ compensation claim could be convinced that the same or similar criteria as identified in O’Connor control for workers’ compensation purposes. Ride-sharing services’ prohibitions against discriminatory acts and the possession of firearms also would seem to reflect control over drivers. A court also could choose to take into account the nature of the ride-sharing industry and conclude that because drivers are integral to the industry’s operations—undertaking work essential to the employer’s regular business—employment status has been established.

In 2018 in another FLSA case, Razak v. Uber Technologies, Inc., Uber was successful in securing summary judgment, but the Third Circuit Court of Appeals reversed in a 2020 ruling.92 The district court was convinced that no factual issue surrounded the freedom from control of the UberBLACK (limousine) drivers who had brought the action. On appeal, however, the court identified several aspects of the Uber-driver relationship that were disputed. For example, “UberBLACK drivers exercise a high level of control, as they can drive as little or as much as they desire, without losing their ability to drive for UberBLACK.”93 Still, “Uber deactivates drivers who fall short of the 4.7-star UberBLACK driver rating and limits the number of consecutive hours that a driver may work.”94 As genuine disputes of material fact existed surrounding control, the court reversed and remanded for trial.95

In contrast, in 2018 in Lawson v. Grubhub, the platform intermediary Grubhub, a food-delivery enterprise, was successful in receiving summary judgment in an FLSA lawsuit.96 There, the plaintiff was a Grubhub delivery driver, and he had agreed in advance that he was an independent contractor. After he was terminated for “gaming” of the app to maximize his earnings, he filed an action alleging improper classification. The federal judge concluded that Grubhub had shown that the plaintiff was, indeed, an independent contractor. The judge reviewed the same criteria as did the court in O’Connor and found that any control exercised by Grubhub over the worker was insufficient to render him an employee.

Thomas Robinson, a coeditor of the Larson treatise, prompted by the Grubhub case, correctly observed that the analysis in this area can be aided by a review of the analogous taxi industry cases.97 And, in fact, the Connecticut Supreme Court has addressed the issue. The court in that case, Hanson v. Transportation General, Inc., determined that a taxicab enterprise, which was alleged to be the deceased worker’s employer, had sufficiently divorced itself of control over the cab driver; the court therefore held that the deceased was an independent contractor and not an employee.98 Notably, the dispatch service (Metro) leased taxis to its “owner-operators” (including the deceased) and charged a “stand fee” but then required them to pay for maintenance, repairs, fines, towing, and taxes related to the vehicle. The owner-operators could also set up their own hours of operation, refuse to accept dispatch calls, hire drivers for the cabs, use the vehicles for personal errands, and keep all fares. Connecticut law reflects what seems to be the majority rule—that is, control is the predominate focus.

A remarkable phenomenon is that Uber now provides liability insurance relative to its drivers’ work, as if it acknowledges some level of potential vicarious liability. Presumably, if sufficient control exists such that liability may follow, Uber is implicitly acknowledging control over drivers that may lead to a finding of employee status.

Transportation network companies and consumer follow-up. One analyst asserted that one aspect of platform intermediary oversight of its workers—service quality standards, as enforced chiefly by consumer follow-up ratings—should not be held by courts to reflect control sufficient to establish an employer-employee relationship.99 Quality-control standards, the analyst argued, “promote trust between platform consumer and provider” and “benefit[] the platform operator, consumer, and provider.”100 This critical aspect of value attendant to platform-provided services will be defeated if quality control is held to equal control sufficient to establish employment. Indeed, were this to be the law, the platform “operator is more likely to forgo the right to impose such standards.”101 The analyst said that the franchisor-franchisee relationship serves as an example of a business relationship whereby one enterprise exerts quality-control standards but does not, under most analyses, become the employer of the franchisee.102

Marketplace contractors. With regard to “marketplace contractors”—that is, workers (handymen, babysitters, pet sitters, and the like) who are connected with homeowners and business owners via a marketplace platform—the analysis is perhaps more difficult. Once again, however, precedent guides the judge or other analyst to the primacy of control and the subsidiary test of the nature of the work.

Although each case must be considered on its own facts, the business models reflected by these types of enterprises at least intuitively do not seem necessarily to create an employer-employee relationship between the app-based intermediary and the worker. Individuals and small businesses have, after all, always connected with clients through intermediary resources (e.g., community bulletin boards and newspapers).103

On the other hand, Duff identified a critique in Tennessee (where a law has been passed to protect marketplace platforms) that refutes this idea. Handy workers had complained to one newspaper “that marketplace platforms set the rates of workers, charge workers fines for changing their work schedule, facilitate payments and change rates of workers according to reviews.”104

As discussed previously, workers dispatched to personal residences do not thereby become employees of their clients. This is so because casual workers (that is, those who perform intermittent work only) not laboring in the regular business of the putative employer are excluded from the definition of “employee”; after all, homeowners have no business in the first place. Importantly, the analysis is different if a commercial entity retains a tasker for labor in an aspect of its regular business. In such instances, the injured tasker will likely have a claim for workers’ compensation against the commercial enterprise.

It is conceivable, however, that an employee of a tasker who turns out to be uninsured for workers’ compensation purposes may, in the event of injury, seek to portray an intermediary like TaskRabbit as a statutory employer. Such a worker’s theory would be that TaskRabbit has operated as a contractor to the customer (the homeowner) and that TaskRabbit has subcontracted all or a portion of the job.

Gig workers as employers. Gig workers who employ others to help them may be considered employers in their own right.

Self-employed individuals who make crafts at home, or engage in even more ambitious manufacturing with a 3D printer, do not seem to fit the bill as employees of their online markets. In this regard, no services are provided to the online market in exchange for an individual’s labor. The larger issue for such individuals is more conventional: if the business becomes successful and the crafter takes on paid assistants, an employer-employee relationship has been created, thus creating social insurance responsibilities. Notably, an Etsy expert wisely recommended that ambitious home crafters purchase workers’ compensation insurance in such situations.105

The same advice is appropriate for “hosts” who advertise their homes for rent on sites like Airbnb. Hosts who utilize cleaning staff for their many houses or apartments are, for workers’ compensation purposes, forming an employer-employee relationship with such workers. An Airbnb adviser correctly admonished that “[a]ny Airbnb host that hires a property manager, cleaning crew, or any other person to work on site would be wise to grab workers compensation insurance.”106

As always, no homeowners, or even commercial liability, policy will cover the work-related personal injury claims of any employee.

Legal Tests Distinguishing Employees from Independent Contractors

As noted at the outset of this article, the employee/independent contractor issue is an old one in workers’ compensation. For years, certain employers have sought to misclassify employees as independent contractors, and the Larson treatise has long characterized this phenomenon as the “deliberate avoidance of [the] employment relation.” In fact, a major portion of the treatise is devoted to the legal tests distinguishing employee status from independent contractor status.

Scholars of employment law invariably introduce the issue by explaining that courts apply three different theories to identify an employee as opposed to a bona fide independent contractor: the control test of common law, the economic realities test, and the relative nature of the work test. Indeed, this breakdown is found in Duff’s textbook.107 Scholars of the current day invariably set forth these various theories as a prelude to treating the challenges of the gig economy.108

The control test, as refined by certain subsidiary factors like the nature of the employer’s business, seems to be the majority approach. That certainly describes the law of Pennsylvania, where control dominates. Many scholars, however, challenge the idea that control should serve as the critical analysis. Control as the critical analysis has been decried in the Larson treatise109 and in the textbook by Joseph Little, Thomas Eaton, and Gary Smith.110 Duff, for his part, stated:

Much of this right to control doctrine was developed to address issues of agency and of “respondeat superior[.]” . . . The design of workers’ compensation statutes—and its bias for worker coverage—is sometimes at odds with the common law’s cautious scrutiny of the employment relationship. Because the design of the system is to spread coverage, the narrowing effect of the common law can create obvious tensions.111

This critique is particularly pertinent when analyzing issues of the gig economy. One scholar, Keith Cunningham-Parmeter, argued that the traditional common-law right of control test is inappropriate, and unworkable, for analyses of whether workers in the platform-based gig economy are employees or independent contractors.112 Like Duff, he identified the reality that the control test was developed centuries ago as the criterion of establishing whether the negligence of an agent of an enterprise toward a third party could be ascribed to the enterprise via respondeat superior. If control, or the right of control, existed, then the enterprise would be considered the master, the agent would be considered the employee, and vicarious liability would attach.

This test, over the last century, has been cut and pasted into areas like wage and hour protections and, of course, workers’ compensation. But all of this, Cunningham-Parmeter correctly argued, really does not make any sense. Respondeat superior is based on the idea that an entity that has the power to control a disempowered, subordinate actor presumably also has the economic wherewithal to answer for such an agent’s torts. When such control does not exist and the agent can be viewed as economically autonomous, it makes sense for that autonomous party to be responsible for its torts—and for the enterprise to be protected. Laws like the FLSA and workers’ compensation, on the other hand, were intended to expand the responsibilities of such enterprises to workers. The control criterion does not abdicate this purpose.

In Cunningham-Parmeter’s view, economic autonomy, and not control, should be the controlling test when considering whether a worker is really an independent contractor. To remedy the situation, he argued that courts and legislatures should follow the example of the California Supreme Court in the recent landmark case, Dynamex Operations West, Inc. v. Superior Court.113 That case, he explained,

embraced a simplified standard—the so-called “ABC test”—to determine whether contemporary workers are genuine independent contractors. Rather than engage in the [control-dominated] multifactorial balancing—a process guaranteed to yield muddled results—the ABC test begins with the presumption that most workers who provide labor to firms are employees. If firms want to overcome this presumption, they must prove three separate elements to establish that their workers possess the marketplace strengths of legitimate independent contractors.114

Those three elements, notably, are inquiries into whether the worker is engaged in the firm’s usual course of business, whether the worker is operating a separate business, and whether the worker is free from control of the purported principal. Cunningham-Parmeter noted that use of this test does not necessarily mean that all platforms will be deemed employers. For example, delivery service workers (as in Dynamex) for enterprises like Grubhub may be deemed employees, but handymen working for a “chore” platform like TaskRabbit may be deemed independent contractors.

Legal Developments Unique to the Gig Workforce

Some jurisdictions have addressed the employment status of true gig workforce workers via statutory amendments. Pennsylvania is a state where such alterations to the law apparently have not been proposed. The amendments fall into one of three classifications. In the first two types of laws, the intended effect is to prevent laborers in the gig workforce from ever having a colorable claim of employee status and hence a cognizable workers’ compensation claim. In the third type of law, the intended effect is precisely the opposite: arguable independent contractors are, through an innovative mechanism, provided with workers’ compensation.

Transportation networking laws. Both Florida and Alaska amended their laws in 2017 to clarify that drivers for Uber and Lyft, and those in similar occupations, are independent contractors and not employees. These provisos are part of broader reforms that regulate transportation networking companies (TNCs) in a variety of ways. Both, for example, require that the driver and/or intermediary carry commercial liability insurance to cover the injury claims of passengers, and both require that drivers be screened to exclude individuals with criminal backgrounds or drunk driving histories.

Such features reflect those of a model law prepared by the National Conference of Insurance Legislators. According to the Council of State Governments, “The model law was based in part on Indiana’s rideshare law that incorporated compromise language agreed to by rideshare company Uber and insurers.”115 The council noted that, even as early as 2016, Arkansas, Indiana, and North Carolina all had altered their laws to recognize app-based drivers as independent contractors.

The Alaska statute was enacted in the wake of earlier administrative action against Uber for alleged misclassification of its drivers as independent contractors. As to the issue of employment status, the 2017 law (Transportation Network Companies Act) provides as follows:

(a) Except as provided in (b) of this section [dealing with a TNC that may be operated by the state, municipality, or tribe], a transportation network company is not an employer of transportation network company drivers . . . . A transportation network company driver is an independent contractor for all purposes and is not an employee of the transportation network company if the transportation network company

(1) does not unilaterally prescribe specific hours during which a driver shall be logged onto the digital network of the transportation network company;

(2) does not impose restrictions on the ability of the driver to use the digital network of other transportation network companies;

(3) does not restrict a driver from engaging in any other occupation or business; and

(4) enters into a written agreement with the driver stating that the driver is an independent contractor for the transportation network company.116

The correlative Florida statute (with some superficial word changes) reads precisely the same.117 Lawyers commenting on the new law, at the time of enactment, remarked:

None of the four requirements is likely to impose any new burdens on the ride-sharing companies. The good news for transportation network companies is that by meeting a low bar for establishing independent contractor status, they will have clarity and certainty of their worker classifications. They will also be protected from claims available to employees arising under state law, such as claims for workers’ compensation, unemployment compensation, and employment discrimination under the Florida Civil Rights Act.118

Marketplace contracting laws. A number of jurisdictions, acting in the same spirit, have enacted laws providing that marketplace contractors are indeed independent contractors and not employees, when certain requirements are met. The Tennessee legislature has enacted such a law, S.B. 1967 (not yet codified). On the issue of the difference between employees and independent contractors, the law provides as follows:

Notwithstanding any law to the contrary, a marketplace contractor is an independent contractor, and not an employee, of the marketplace platform for all purposes under state and local laws, rules, and ordinances . . . if all of the following conditions are met:

(1) The marketplace platform and marketplace contractor agree in writing that the contractor is an independent contractor with respect to the marketplace platform;

(2) The marketplace platform does not unilaterally prescribe specific hours during which the marketplace contractor must be available to accept service requests from third-party individuals or entities. If a marketplace contractor posts the contractor’s voluntary availability to provide services, the posting does not constitute a prescription of hours for purposes of this subdivision (a)(2);

(3) The marketplace platform does not prohibit the marketplace contractor from using any online-enabled application, software, website, or system offered by other marketplace platforms;

(4) The marketplace platform does not restrict the marketplace contractor from engaging in any other occupation or business;

(5) The marketplace platform does not require marketplace contractors to use specific supplies or equipment; and

(6) The marketplace platform does not provide on-site supervision during the performance of services by a marketplace contractor.119

In 2018, Duff commented on this Tennessee enactment. He pointed out that a number of other states, including Florida, Indiana, Iowa, Kentucky, and Utah, had already enacted such laws. He found it unsatisfactory that a significant swath of workers are, as a matter of law, excluded from the definition of “employee” for workers’ compensation purposes. Such laws—said to be the result of lobbying by the platform-intermediary-based enterprise Handy (which connects consumers with handymen)—are, in Duff’s view, an unwelcome development because the laws could be utilized widely to exclude any number of workers who are dispatched by their companies and then supervised remotely.120

Another critique of the Handy-sponsored litigation suggested a possible perverse result of such laws. The owner of a conventional maid and handyman service insisted that laws like the Tennessee bill

will lead existing employers to convert to a lower-cost independent contractor model in order to compete. “It won’t just be Handy, it’ll be all of these virtual companies that are out there now[.]” . . . That can be a raw deal for workers, who might be drawn in by a slightly higher hourly rate but then realize they will have to cover their equipment, transportation, insurance and self-employment taxes.121

New York Black Car Operators’ Injury Compensation Fund. Under this innovation, enacted in 1999, limousine drivers who otherwise were independent contractors for their limousine services, or central dispatch operators,122 are deemed employees of the New York Black Car Operators’ Injury Compensation Fund (Black Car Fund), a special fund administered within the framework of the New York workers’ compensation law.123 According to the Black Car Fund’s website, “[t]he statute covers all drivers of The Black Car Fund Member Bases [dispatch operators] in the state of New York, although 98% of the companies are based in the greater New York City Metropolitan area. Bases must become members of The Black Car Fund if they meet the criteria outlined in the statute,” meaning that they cannot own more than 50 percent of their vehicles and must do a minimum of 90 percent of their business on a noncash basis.124 As for the source of revenue, “The Fund derives its income from a 2.5% passenger surcharge, . . . which is billed and collected by Member Bases from their clients and then remitted to The Fund.”125 The Black Car Fund has approximately 400 member bases “and collectively, there are more than 130,000 affiliated drivers covered by Workers’ Compensation.”126 As of 2009, the Black Car Fund, which technically could be self-insured, provided workers’ compensation insurance coverage through the State Insurance Fund, a corollary to the Pennsylvania State Workers’ Insurance Fund (SWIF).

The Black Car Fund has received attention as an innovation that could serve as an example for how workers’ compensation could be provided for various members of the gig workforce. Indeed, according to one media account, “[i]t is often cited as a model for how benefits might function in the future. . . . Other states, including Washington and New Jersey, are considering bills mandating the collection of fees for various freelance services, which would then be used to pay for those workers’ benefits.”127

California Development: The Dynamex Decision and AB 5

In Dynamex, discussed earlier, the California Supreme Court filed a decision that, for certain purposes of state law, narrowed its rule for classification of workers as independent contractors.128 In the course of doing so, the court explained that the hiring entity asserting independent contractor status must establish each of the three factors of the ABC test, i.e., show that a worker is free from its control, performing work outside of the usual course of its business, and customarily engaged in independent work.129

The legislature soon codified the Dynamex ruling (AB 5), and this major amendment is indeed applicable to workers’ compensation. The new law provides that for purposes of the Labor Code (and workers’ compensation in particular, as of July 1, 2020), an individual providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates all of the following:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work . . . .

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business . . . .130

The legislature stated that its intent in enacting the amendment is

to ensure workers who are currently exploited by being misclassified as independent contractors instead of recognized as employees have the basic rights and protections they deserve under the law, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave.131

The law, predictably, has been subject to criticism from business. One early commentator noted that many startup companies simply cannot afford to pay minimum wage, thus imperiling their viability.132 Others have argued that the law overreaches. A Pittsburgh commentator pointed out that the trucking industry had been successful in securing an injunction against the law’s applicability to that industry, and noted that California legislation can often foreshadow similar developments in other states.133 Similarly, a California insurance broker admonished that “this law is not isolated to California AB 5. It is coming to a state near you. . . . Be prepared.”134

As of January 27, 2020, the law was not yet in effect for workers’ compensation purposes. One insurance broker, however, provided the following guidance to employers concerned about the law:

  • California businesses should consider conducting a thorough review of their operations. Any workers currently classified as independent contractors should be reexamined utilizing the new ABC test and reclassified by January 1, 2020 (and no later than July 1, 2020 for workers’ compensation purposes).
  • Businesses should report any reclassified employees to their agent or insurance carrier’s underwriting department to ensure that reclassified employees are covered by a workers’ compensation insurance policy by July 1, 2020, irrespective of policy inception/renewal date.
  • Businesses must remain aware that a failure to properly classify employees may raise additional issues more costly than failing to obtain workers’ compensation coverage for their misclassified employees (e.g., wage and hour violations).135

According to one report, Uber and Lyft have chosen not to reclassify and are challenging the legislation as unconstitutional.136 Duff critiqued these lawsuits and found them to be based on obsolete constitutional thinking (i.e., that the legislature cannot regulate economic matters in a manner that treats certain enterprises differently than others) and, ultimately, futile.137

Conclusion

The rise of nonstandard work and workers laboring in the gig presents both social and legal challenges.

For society, the first question is how work injuries and deaths sustained by such workers—typically classified as independent contractors—are to be compensated. The century-old arrangement has been that most workers are covered by workers’ compensation. That model obviously is threatened by these new work arrangements. The second question is whether society’s commitment to health and safety through the financial incentive of workers’ compensation, direct regulation by OSHA, and internal regulation via employer-employee safety committees can survive with integrity a work environment comprised of an increasing number of nonemployees.

As for the legal community, lawyers, judges, and insurance professionals must be acquainted with the rise of nonstandard work and labor in the gig. Still, while the newer forms of work present conceptual challenges, it may be that the principles surrounding the employer-employee relationship developed over the last century under the workers’ compensation laws can be employed to address these provocative new issues.

In the author’s opinion, whether the march toward broadened (some say majority) independent contractor status on the part of workers is a fait accompli remains to be seen. Laws like A.B. 5, other state efforts to address misclassification, and societal opposition to denigration of basic worker rights and dignity may—and hopefully will—slow the process.

Notes

1. “The gig” is a shorthand way to refer to the gig workforce. See Colin Crouch, Will the Gig Economy Prevail? (2019). As to both “the gig” and “gig economy,” see Zane Muller, Algorithmic Harms to Workers in the Platform Economy: The Case of Uber, 53 Colum. J.L. & Soc. Probs. 167 (2020) (defining “gig economy” as “an ill-defined grouping meant to describe firms that facilitate peer-to-peer services via digital platform marketplaces”).

2. See John Howard, Nonstandard Work Arrangements and Worker Health and Safety, 60 Am. J. Indus. Med. 1 (2017) (commenting on the size of the nonstandard workforce).

3. As discussed later in this article, in virtually all gig workforce schemes, for workers to be able to secure work through an intermediary’s app, the laborers must agree at the outset that they are independent contractors. Many such enterprises reference the lack of workers’ compensation coverage as well. See infra section on classifications of nonstandard work (subsection on gig workers).

4. David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It (2014).

5. Joseph McHugh, Counsel, FedEx Ground, Allegheny Cty. Bar Ass’n CLE Panel: The Gig Economy from an Employer’s Perspective (Jan. 22, 2020).

6. California’s AB 5, which establishes the “ABC” test, is a prime example. Under that law, a worker is presumed to be an employee, and the enterprise desiring to show independent contractor status has the burden of proof. It must show that the person (1) “is free from the control and direction of the hiring entity in connection with the performance of the work”; (2) “performs work that is outside the usual course of the hiring entity’s business”; and (3) “is customarily engaged in an independently established trade, occupation, or business.” AB 5 is discussed infra. Pennsylvania’s Construction Workplace Misclassification Act is another example. See 43 Pa. Stat. §§ 933.10–933.17. As for administrative action, in Washington State, workers of the app-based enterprise Postmates filed a number of injury claims, prompting the powerful agency in that state to assess retroactive premiums on the company. Nat Levy, Postmates Ordered to Pay 2+ Years of Workers’ Comp Premiums for More Than 3,000 Couriers, GeekWire (Dec. 13, 2016), https://www.geekwire.com/2016/postmates-ordered-pay-2-years-workers-comp-premiums-3000-couriers; see also Delivery Express, Inc. v. Wash. State Dep’t of Labor & Indus., 442 P.3d 637 (Wash. Ct. App. 2019) (upholding on appeal premiums and fine of nearly $1 million against courier service that had misclassified workers).

7. See Howard, supra note 2. This rule is called the OSHA Multi-Employer Citation Policy. Notably, it was upheld by the Fifth Circuit Court of Appeals in Acosta v. Hensel Phelps Construction Co., 909 F.3d 723 (5th Cir. 2018). A kindred OSHA rule is intended to encourage safety with regard to temporary workers. Under this rule, “staffing agencies and host employers are jointly responsible for maintaining a safe work environment for temporary workers—including, for example, ensuring that OSHA’s training, hazard communication, and recordkeeping requirements are fulfilled.” Protecting Temporary Workers, Occupational Safety & Health Admin., https://www.osha.gov/temp_workers (last visited May 31, 2020).

8. See Bradley Smith, Holding a Square Peg and Choosing between Two Round Holes: The Challenge Workers’ Compensation Law Faces with Uber and the Sharing Economy, Lex & Verum (Nat’l Ass’n of Workers’ Comp. Judiciary), May 2016, at 17.

9. Suzanne Downing, Ridesharing Bill Passes, Making Way for Uber, Lyft, Must Read Alaska (May 17, 2017), https://mustreadalaska.com/ridesharing-bill-passes-uber-lyft.

10. Larson’s Workers’ Compensation Law, originally written by Arthur Larson, was first published in 1952.

11. See, e.g., 3D Trucking Co. v. WCAB (Fine & Anthony Holdings Int’l), 921 A.2d 1281 (Pa. Commw. Ct. 2007) (concluding that joint employment existed).

12. See Sota Constr. Servs., Inc. v. WCAB (Czarnecki), No. 87 C.D. 2019, 2019 WL 6971522 (Pa. Commw. Ct. Dec. 20, 2019).

13. Megan U’Sellis, Safety Concerns Arise After Tragic Death of Young Gig Worker, Fisher Phillips (Dec. 22, 2017), https://www.fisherphillips.com/gig-employer/safety-concerns-arise-after-tragic-death-of. Other tragedies of this type have been reported. See infra note 49 and accompanying text.

14. “[A]s with any insurance system, the more inclusive the pool of individuals being insured, the greater spreading of risk and the more likely the overall cost of the system can be rationally managed,” noted Professor Michael Duff. “It follows that any narrowing of the applicability of the statute to classes of workers will limit both the risk spreading and the cost reduction functioning of the workers’ compensation insurance system.” Michael C. Duff, Workers’ Compensation Law: A Context and Practice Casebook 203 (2d ed. 2017).

15. Persuasive evidence exists that work via temporary services and other gig work (like the intermittent work of many platform-based drivers) are associated with reduced attention to safety. Indeed, gig workforce workers have been characterized as “taking their safety into their own hands.” Roger Rabb, Examining Occupational Risks for the Gig Worker: Is Enough Being Done to Protect This Growing Segment of the Workforce?, in Workers’ Compensation: Emerging Issues Analysis (Thomas A. Robinson ed., 2017).

16. Howard, supra note 2.

17. Patrick Gillespie, Intuit: Gig Economy Is 34% of U.S. Workforce, CNN Money (May 24, 2017), https://money.cnn.com/2017/05/24/news/economy/gig-economy-intuit/index.html. For a more recent estimate, see Alysa J. Ward, The More Things Change, the More They Remain the Same: Worker Classification in the Gig Economy, 34 Westlaw J. Emp., Dec. 17, 2019 (citing a Federal Reserve study estimating that the number of Americans participating in the gig economy is as high as 75 million).

18. Elisabeth Buchwald, The Government Has No Idea How Many Gig Workers There Are, and That’s a Problem, MarketWatch (Jan. 7, 2019), https://www.marketwatch.com/story/the-government-has-no-idea-how-many-gig-workers-there-areheres-why-thats-a-problem-2018-07-18.

19. McHugh, supra note 5, at 6, 7. As to reports that independent contractor growth is outpacing employee hiring, see also New Paychex Data Shows Independent Contractor Growth Outpaces Employee Hiring in Small Businesses, Cision (Jan. 9, 2019), https://www.prnewswire.com/news-releases/new-paychex-data-shows-independent-contractor-growth-outpaces-employee-hiring-in-small-businesses-300775712.html (declaring that “independent contractors are changing the business landscape”).

20. Howard, supra note 2.

21. See, e.g., J. Miller Co. v. Mixter, 277 A.2d 867 (Pa. Commw. Ct. 1971).

22. In a recent case litigated by this author, the worker was an 80-year-old cement mason, typically laboring as a skilled foreman, who had worked for his cement masonry employer eight hours per day for 20 years. He was considered an independent contractor and had been paid as a “1099 worker” for two decades. He then fell and broke his hip. In the litigation that ensued, the defense was that he was not an employee.

23. Weil, supra note 4.

24. Molly Tran & Rosemary K. Sokas, The Gig Economy and Contingent Work: An Occupational Health Assessment, 59 J. Occupational & Envtl. Med. 63 (2017), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5374746.

25. See Charles Heying, Portland’s Artisan Economy: Beyond the Myth of Romantic Localism, 18 Hedgehog Rev., Spring 2016, at 68 (stressing the importance of the burgeoning activities of local artisans and crafters, who have often started off small and grown into and with the global economy; admonishing that too often the efforts of local artisans are dismissed as a “sideshow to the real economy”; and asserting that “[u]rban economies in the early part of the twenty-first century will look a lot more like an artisan economy than they will the industrial economy of the century past”); see also Liz Carey, Legislators, Businesses: The Time to Work on Gig Economy Protections Is Now, WCI 360 (Feb. 8, 2018), https://www.wci360.com/juris-masters-2 (quoting a congressman, proposing protections to gig workers, as saying, “Whether you make a living through mobile car services or by selling crafts online, workers deserve access to benefits.”).

26. Lawson v. Grubhub, Inc., 302 F. Supp. 3d 1071 (N.D. Cal. 2018).

27. Seth D. Harris & Alan B. Krueger, A Proposal for Modernizing Labor Laws for Twenty-First Century Work: The “Independent Worker” (Hamilton Project, Discussion Paper 2015-10, Dec. 2015).

28. Tran & Sokas, supra note 24.

29. Crouch, supra note 1, at 6.

30. Id.

31. Brent Cebul, Liberated as Hell: The Autonomous Worker and the Hollowed Workplace, 18 Hedgehog Rev., Spring 2016, at 34. For the same view, see Henry H. Perritt Jr., Don’t Burn the Looms—Regulation of Uber and Other Gig Labor Markets, 22 SMU Sci. & Tech. L. Rev. 51 (2019) (reporting on interviews with Uber drivers).

32. Cebul, supra note 31.

33. Id. Yet some aspects of new work patterns seem troubling to him. Indeed, his depictions of workers engaged in “hoteling” (i.e., workers reporting to work without any fixed, personal space) are appalling.

34. See Theodore R. Marmor et al., Social Insurance: America’s Neglected Heritage and Contested Future 161–72 (2014).

35. See Weil, supra note 4.

36. John W. Ruser, Implications of Nonstandard Work for Worker Safety and Health, in Nat’l Acad. Soc. Ins., Nonstandard Work and Social Insurance: Designing Risk Protections for a Changing Workforce (2018), https://www.nasi.org/sites/default/files/Ruser.pdf; see also Jake Heller & Erik Ortiz, Temp Work Now a Permanent Fixture, Causing Problems for “Invisible” Workforce, NBC News (Aug. 30, 2017), https://www.nbcnews.com/business/economy/temp-work-now-permanent-fixture-creating-problems-invisible-workforce-n793466.

37. Ruser, supra note 36; see also Scott Prange, The Gig Economy and Occupational Safety and Health, 23 Haw. B.J., Nov. 2019, at 4 (reviewing the “risks of gig work”: (1) nature of the jobs, (2) education and experience, (3) training, and (4) psychological detriments).

38. Ruser, supra note 36.

39. David Michaels, Protecting the Safety and Health of Workers in Nonstandard Work Relationships, in Nat’l Acad. Soc. Ins., Nonstandard Work and Social Insurance: Designing Risk Protections for a Changing Workforce (2018), https://www.nasi.org/sites/default/files/Michaels.pdf.

40. Id.; Weil, supra note 4.

41. Howard, supra note 2; see supra note 7 and accompanying text.

42. Tran & Sokas, supra note 24.

43. Id.

44. Id.

45. Nat’l Emp’t Law Project, Policy Brief: On-Demand Workers Should Be Covered by Workers’ Compensation 1–2 (2016) [hereinafter NELP Policy Brief].

46. Prange, supra note 37, at 4.

47. Paul E. Goately, Workplace Safety in the Gig Economy: Is Anyone Actually Paying Attention?, OH&S (Dec. 16, 2019), https://ohsonline.com/articles/2019/12/16/workplace-safety-in-the-gig-economy-is-anyone-actually-paying-attention.aspx.

48. NELP Policy Brief, supra note 45, at 2.

49. U’Sellis, supra note 13.

50. Howard, supra note 2, at 10.

51. Id.

52. Press Release, Cornell Univ., “Temp” Wins Princeton Book Award (Oct. 14, 2019), https://www.ilr.cornell.edu/news/%E2%80%9Ctemp%E2%80%9D-wins-princeton-book-award.

53. Id.

54. Lex K. Larson & Thomas A. Robinson, Larson’s Workers’ Compensation Law ch. 67, abstract (desk ed. 2000) (emphasis added).

55. JFC Temps, Inc. v. WCAB (Lindsay & G&B Packing), 680 A.2d 862 (Pa. 1996).

56. Id. at 864–65.

57. Dempster v. Waste Mgmt. Inc., 41 Pa. D. & C.4th 401 (C.P. 1998), aff’d in an unreported decision, 736 A.2d 687 (Pa. Super. Ct. 1999), petition for allowance of appeal denied, 739 A.2d 166 (1999), cert. denied, 120 S. Ct. 175 (1999).

58. Nagle v. TrueBlue, Inc., 148 A.3d 946 (Pa. Commw. Ct. 2016).

59. See David B. Torrey & Andrew E. Greenberg, Pennsylvania Workers’ Compensation: Law & Practice §§ 2:40 et seq. (3d ed. 2008 & Supp. 2019–20).

60. See, e.g., Tu-Lane Invs., Inc. v. Orr, 889 So. 2d 961 (Fla. Dist. Ct. App. 2004).

61. The process in Pennsylvania became regulated in 2013 with Act 102 of 2012, the Professional Employer Organization Act. It has been referred to as “Act 102” and is codified not in the Workers’ Compensation Act but in title 43 (Labor). See 43 Pa. Stat. §§ 933.01–.04. See generally David B. Torrey, Professional Employer Organizations: Background, Issues in Workers’ Compensation, and Recent Court Cases, Paper Presented at the 33d IAIABC College (2007).

62. Graeme Newman, The New Age of Technology: 3D Printing, Ins. J. (May 6, 2013), https://www.insurancejournal.com/magazines/mag-features/2013/05/06/290460.htm; see also Ingrid Sapona, Sorting Out the Insurance Risks Related to 3D Printers, Advantage Monthly: Emerging Trends Papers (Nov. 2015), https://www.insuranceinstitute.ca/en/cipsociety/information-services/advantage-monthly/1115-3dprinting.

63. See 77 Pa. Stat. § 22 (“The term ‘employee,’ as used in this act is declared to be synonymous with servant, and includes—All natural persons who perform services for another for a valuable consideration, exclusive of . . . persons whose employment is casual in character and not in the regular course of the business of the employer . . . .”).

64. See generally Weil, supra note 4.

65. 124 A.3d 790 (Pa. Commw. Ct. 2015).

66. Id. at 799.

67. Kati L. Griffith, An Empirical Study of Fast-Food Franchising Contracts: Towards a New “Intermediary” Theory of Joint Employment, 94 Wash. L. Rev. 171, 173 (2019).

68. Id.

69. Id. at 186.

70. See, e.g., Joseph H. King Jr., Limiting the Vicarious Liability of Franchisors for the Torts of Their Franchisees, 62 Wash. & Lee L. Rev. 417 (2005).

71. Michael Lotito & James Paretti Jr., Franchising and California at a Crossroads: The Dynamics of Dynamex and the ABC Test, JD Supra (July 19, 2019), https://www.jdsupra.com/legalnews/franchising-and-california-at-a-65981.

72. U.S. Terms of Use, Uber, https://www.uber.com/legal/en/document/?name=general-terms-of-use&country=united-states&lang=en (last modified Mar. 17, 2020).

73. Catherine Tucciarello, The Square Peg between Two Round Holes: Why California’s Traditional Right to Control Test Is Not Relevant for On-Demand Workers, 13 Seton Hall Cir. Rev. 351, 359 (2017).

74. See generally Ethan Rubin, Independent Contractors or Employees? Why Mediation Should Be Utilized by Uber and Its Drivers to Solve the Mystery of How to Define Working Individuals in a Sharing Economy Business Model, 19 Cardozo J. Conflict Resol. 163 (2017).

75. Service Professional Agreement, Handy, https://www.handy.com/pro_terms (last updated Dec. 30, 2019).

76. Id.

77. See, e.g., Muller, supra note 1, at 167 (“Technological change has given rise to the much-discussed ‘gig’ or ‘platform economy,’ but labor law has yet to catch up. . . . The potential for exploitation of workers is immense, however the remedies available to workers who are harmed by algorithm design choices are as yet undeveloped.”).

78. See, e.g., Kertesz v. Korsh, 686 A.2d 368 (N.J. Super. Ct. App. Div. 1996) (“The function of Workers’ Compensation legislation is to require the consumer to ultimately bear the cost of injuries to workers through the cost of the service or product. Thus, whether a worker is an employee or an independent contractor is crucial to the determination of whether the worker should receive benefits and is to be determined through the application of two tests: the ‘control test’ and the ‘relative nature of the work test.’” (citation omitted)).

79. See Perritt, supra note 31.

80. Jeremias Prassl, Humans as a Service: The Promise and Perils of Work in the Gig Economy 5, 14 (2018).

81. Razak v. Uber Techs., Inc., No. 16-573, 2018 WL 1744467 (E.D. Pa. Apr. 11, 2018), rev’d & remanded, No. 18-1944, 2020 WL 1022404 (3d Cir. Mar. 3, 2020); Lawson v. Grubhub, Inc., 302 F. Supp. 3d 1071 (N.D. Cal. 2018); O’Connor v. Uber Techs., Inc., 82 F. Supp. 3d 1133 (N.D. Cal. 2015).

82. Chakravarthi Narasimhan et al., Sharing Economy: Review of Current Research and Future Directions, 5 Customer Needs & Sols. 93, 93–94 (2018), http://faculty.marshall.usc.edu/Davide-Proserpio.

83. Agnieszka McPeak, Sharing Tort Liability in the New Sharing Economy, 49 Conn. L. Rev. 171 (2016), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2776429.

84. Michael C. Duff, Why Lawson v. Grubhub, Inc. Did Not Change the Independent Contractor World (and No One Case Could), Workers’ Compensation L. Prof Blog (Feb. 17, 2018), https://lawprofessors.typepad.com/workerscomplaw/2018/02/why-lawson-v-grubhub-inc-did-not-change-the-independent-contractor-world-and-no-one-case-could.html (“An individual is covered as an employee under an employment statute—including workers’ compensation statutes—if he or she fits the statutory employee definition. The analysis will always be fact-dependent and complicated.”).

85. See, e.g., Fye v. Woodland Forest Prods. Inc., 39 Pa. D. & C.4th 420 (C.P. 1998) (concerning a truck driver, an employee of a service, who had a potentially cognizable action against a logging company that had contracted with the service to haul lumber).

86. For example, the Uber agreement, supra note 72, has a prominent arbitration clause.

87. Michael C. Duff, Compulsory Arbitration: More Empty Federal Preemption of State Workers’ Comp?, 19 TortSource, no. 1, Fall 2016, at 3.

88. See TaskRabbit Global Terms of Service, TaskRabbit, https://www.taskrabbit.com/terms (last updated Dec. 18, 2019).

89. 82 F. Supp. 3d 1133 (N.D. Cal. 2015).

90. Id. at 1149–50.

91. Id. at 1151.

92. No. 16-573, 2018 WL 1744467 (E.D. Pa. Apr. 11, 2018), rev’d and remanded, No. 18-1944, 2020 WL 1022404 (3d Cir. Mar. 3, 2020).

93. Razak, 2020 WL 1022404.

94. Id.

95. Id.

96. 302 F. Supp. 3d 1071 (N.D. Cal. 2018).

97. Thomas A. Robinson, California Grubhub Driver Is Independent Contractor, Not Employee, Workcomp Writer (Feb. 18, 2018), https://www.workcompwriter.com/2018/02.

98. 716 A.2d 857 (Conn. 1998).

99. E. Gary Spitko, A Structural-Purposive Interpretation of “Employment” in the Platform Economy, 70 Fla. L. Rev. 409 (2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2945130.

100. Id. at 409.

101. Id.

102. Id. at 441.

103. See Joseph W. McHugh, Looking through the (Mis)Classifieds: Why TaskRabbit Is Better Suited Than Uber and Lyft to Succeed against a Worker Misclassification Claim, 66 Clev. St. L. Rev. 649 (2018); see also Keith Cunningham-Parmeter, Gig-Dependence: Finding the Real Independent Contractors of Platform Work, 39 N. Ill. U. L. Rev. 379 (2019).

104. Michael C. Duff, All the World’s a Platform?: Some Remarks on “Marketplace Platform” Employment Laws 4 (Jan. 2020) (unpublished paper), https://works.bepress.com/michael_duff/18.

105. Jason Malinak, Etsy-preneurship: Everything You Need to Know to Turn Your Handmade Hobby into a Thriving Business (2012).

106. Types of Insurance for Airbnb Hosting, Payfully (Oct. 25, 2017), https://blog.payfully.co/types-of-insurance-for-airbnb-hosting-39648ae00d19.

107. Duff, Workers’ Compensation Law, supra note 14, at 203–37. Duff stated that the control test “asks who—the employer or the worker—is in control of the work at a given workplace . . . ; the analysis is normally conducted by considering various ‘factors’ of control.” Duff noted that the IRS test features 20 subelements. The economic realities test asks, “As a practical matter, what was the relationship between the worker and the employer?” The relative nature of the work test “typically has two parts: an assessment of the character of the worker’s work; and the relationship of the worker’s work to the purported employer’s business.”

108. See, e.g., Laurie E. Leader, Whose Time Is It Anyway?: Evolving Notions of Work in the 21st Century, 6 Belmont L. Rev. 96 (2019).

109. Larson & Robinson, supra note 54, at ch. 60, abstract.

110. Joseph W. Little et al., Workers’ Compensation: Cases and Materials 102 (6th ed. 2004).

111. Duff, Workers’ Compensation Law, supra note 14, at 205.

112. Cunningham-Parmeter, supra note 103, at 382, 390 (providing an account of the efforts of platform-based gig enterprises, via “clever branding,” to establish their workers as independent contractors, and referring to this practice as reflecting “platform exceptionalism”). The idea here is that the gig economy presents a whole new type of business innovation that does not have employees in the first place. After all, Uber is purportedly not a transportation enterprise but, instead, a technology company. Cunningham-Parmeter is rightly suspicious of this rhetoric.

113. 416 P.3d 1 (Cal. 2018).

114. Cunningham-Parmeter, supra note 103, at 383–84 (footnote omitted).

115. Sean Sloane, Council of State Gov’ts, State Regulation of Rideshare Companies 2 (2016), https://knowledgecenter.csg.org/kc/system/files/CR_rideshare.pdf.

116. Alaska Stat. § 28.23.080. For background surrounding the Alaska statute, see Downing, supra note 9.

117. Fla. Stat. § 627.748(9).

118. Anna P. Lazarus & Kevin J. White, Florida Legislation Establishes That Ride-Sharing Drivers Are Independent Contractors, Not Employees, Hunton Andrews Kurth (May 23, 2017), https://www.huntonlaborblog.com/2017/05/articles/employeeindependent-contractor/florida-legislation-establishes-ride-sharing-drivers-independent-contractors-not-employees.

119. S. 1967(a), 110th Leg. (Tenn. 2018) (to be codified at Tenn. Code Ann. §§ 50-10-101 et seq.), http://www.capitol.tn.gov/Bills/110/Bill/SB1967.pdf.

120. Michael C. Duff, More Contractual Opt-Out: The Gig Race to the Bottom Rolls On to Georgia and Back to the 19th Century, Workers’ Compensation L. Prof Blog (Mar. 27, 2018), https://lawprofessors.typepad.com/workerscomplaw/2018/03/more-contractual-opt-out-the-gig-race-to-the-bottom-rolls-on-to-georgia-and-back-to-the-19th-century.html; Michael C. Duff, New Tennessee “Gig” Law: “Handyman Special” or New Flavor of Opt-Out, Workers’ Compensation L. Prof Blog (Mar. 20, 2018), https://lawprofessors.typepad.com/workerscomplaw/2018/03/new-tennessee-gig-law-handyman-special-or-new-flavor-of-opt-out.html; Michael C. Duff, Workers’ Compensation Deregulation in Iowa: Why State Gig Laws Now?, Workers’ Compensation L. Prof Blog (Apr. 8, 2018), https://lawprofessors.typepad.com/workerscomplaw/2018/04/workers-compensation-deregulation-in-iowa-why-state-gig-laws-now.html. For a thorough critique, see Duff, All the World’s a Platform?, supra note 104.

121. Lydia DePillis, For Gig Economy Workers in These States, Rights Are at Risk, CNN Money (Mar. 14, 2018), https://money.cnn.com/2018/03/14/news/economy/handy-gig-economy-workers/index.html.

122. “Central dispatch facilities” are “businesses that dispatch ‘black car operators’ to pick up and discharge passengers in New York State.” Central Dispatch Facility, N.Y. Dep’t of St. Division of Licensing Servs., https://www.dos.ny.gov/licensing/centdispatch/centdispatch.html (last visited May 31, 2020). Such enterprises “must become members of a not-for-profit corporation[, the] New York Black Car Operators’ Injury Compensation Fund, Inc. (Fund). The purpose of the Fund is to administer payment of workers’ compensation to black car operators who are registered owners of a for-hire vehicle or a driver designated by such a registered owner to operate his/her for-hire vehicle and who is dispatched by a central dispatch facility.” Id. Examples (among many others) include Big Apple Car Inc. and Roosevelt Car & Limo.

123. N.Y. Exec. Law §§ 160-cc to -oo.

124. History, Black Car Fund, https://www.nybcf.org/history (last visited May 31, 2020).

125. Id.

126. Id.

127. Black Car Fund Business Model Featured on NPR, Black Car News (Feb. 27, 2018), https://www.blackcarnews.com/article/black-car-fund-business-model-featured-on-npr.

128. Dynamex Operations W., Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018).

129. Id. at 42–43.

130. Cal. Labor Code § 2750.3(a)(1).

131. A.B. 5, § 1, 2019–2020 Leg. (Cal. 2019).

132. Braden Seibert, Protecting the Little Guys: How to Prevent the California Supreme Court’s New “ABC” Test from Stunting Cash-Strapped Startups, 12 J. Bus. Entrepreneurship & L. 181 (2019).

133. McHugh, supra note 5.

134. James Moore, California AB 5 Causes Workers Comp Conundrum for Gig Workers, WorkersCompensation.com (Jan. 9, 2020), https://www.workerscompensation.com/news_read.php?id=34634.

135. Tom Collins, What You Need to Know about California’s New Assembly Bill 5, CopperPoint (Dec. 18, 2019), https://www.copperpoint.com/blog/what-you-need-to-know-about-californias-new-assembly-bill-5.

136. Dan Eaton, Three Ways to Fix the AB 5 Independent Contractor Law, San Diego Union-Trib. (Jan. 20, 2020), https://www.sandiegouniontribune.com/business/story/2020-01-20/three-ways-to-fix-the-ab-5-independent-contractor-law.

137. Michael C. Duff, Ipse Dixit: The Deep Legal Stirrings in the “Gig” Employers’ Challenge of California Employment Law AB 5, Workers’ Compensation L. Prof Blog (Jan. 5, 2020), https://lawprofessors.typepad.com/workerscomplaw/2020/01/ipse-dixit-the-deep-legal-stirrings-in-the-gig-employers-challenge-of-california-employment-law-ab-5.html.

Entity:
Topic:

David B. Torrey

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David B. Torrey is a workers’ compensation judge for the Pennsylvania Department of Labor & Industry and an adjunct professor of law at the University of Pittsburgh School of Law. The author thanks Justin D. Beck at Thomas, Thomas & Hafer LLP in Pittsburgh, Pennsylvania, for his editing and proofing assistance. All opinions are strictly those of the author and not of the Commonwealth of Pennsylvania.