More and more workers — especially young workers — are turning to the “gig” economy of freelance and contract work. But as this evolution plays out, politicians and business leaders are grappling with exactly how to regulate this economy.
A big step is happening in California, where a law that went into effect on Jan. 1 is forcing many companies to reclassify contractors as employees. The state labor department has argued that the measure is about protecting job quality, but Uber and delivery-company Postmates — both of which rely heavily on the use of gig workers — have called the law unconstitutional in a recently filed lawsuit. And right before the New Year, a federal judge issued a temporary restraining order to stop the law from impacting independent truckers in California, at least for now.
As I wrote before, the gig economy is very much in its infancy, so it will be interesting to see how things shake out in California and elsewhere. The U.S. Department of Labor last year offered six factors to consider when analyzing whether someone should be classified as a gig worker or an employee. Plus’s VP of Consulting Services Chris Pardo did a nice job reviewing that topic in May.
Chris also wrote about the intersection of the gig economy and global mobility in November 2018, and his main takeaway still rings very true:
“Companies, and their global mobility programs, will have to re-think the basic assignment or relocation structure and package and evaluate how best to address employment or project offers, compensation, portable benefits, tax and immigration issues as they seek to secure top gig workers. It is creating some interesting considerations for both mobility and talent management groups.”
As we’re seeing in California, the gig economy is very much in flux. Mobility leaders should be keeping tabs on this evolution and adjusting their programs as needed.
Advocates say the new law offers guaranteed wage protections like an hourly minimum wage and workers compensation insurance. Opponents say the law is expensive for businesses and unfair, since it offers exemptions to some industries and not others. There are workers who have spoken out in favor and against the law.