Congress Must Protect Gig Economy Workers | Citizens Against Government Waste

Congress Must Protect Gig Economy Workers

The WasteWatcher

Whether they deliver groceries, provide dinner, or help out with a ride, gig economy workers have become essential in the modern economy. Millions of Americans happily welcome them and their services into their lives every day. They find these individuals to be helpful, reliable, and efficient. These workers are also independent, self-reliant, and entrepreneurial.

Gig economy workers have been particularly valuable during the pandemic, as stay-at-home orders kept tens of millions across the country from performing their normal activities, not only at their place of employment, but also at restaurants, grocery stores, and shopping malls.

Allowing gig economy workers to maintain their independence and jobs requires them to be protected in the next coronavirus relief package. Fortunately, the provisions of the Helping Gig Economy Workers Act, sponsored by Sens. Mike Braun (R-Ind.), Bill Cassidy (R-La.), Tim Scott (R-S.C.), and Kelly Loeffler (R-Ga.), have been included in the HEALS Act, introduced on July 27, 2020 by Senate Majority Leader Mitch McConnell (R-Ky.) and Sen. John Cornyn (R-Texas). It would allow gig economy workers to obtain financial assistance and protective equipment from platform companies like Uber, Lyft, Grub Hub, Caviar, Instacart, and others, without being responsible for legal liability during the duration of the COVID-19 emergency. As Sen. Braun said, the legislation “will provide a safe harbor for businesses who help the temporary and service workers helping us during COVID-19.”

Sen. Scott’s May 21, 2020 press release described the bill as allowing “digital market place companies to provide, through the duration of the COVID-19 crisis, payments, health benefits, trainings, and PPE to users of the their digital marketplace without it being used as evidence in any federal, state, or local law, ordinance, or regulation for the purposes of determining whether a user is considered an employee or independent contractor or the company is considered a joint employer.”

Since these workers are not employees of these companies, they need this specific and much-needed protection. Without the safe harbor, they would be reclassified nationwide as employees, undermining their business model and likely eliminating their jobs.  

Gig economy workers have made a choice about how and when they work that is far different than the traditional nine-to-five job, where the employer is in control of all aspects of every position in his or her business. They are independent contractors who are free to choose when and how they work or if they want to work at all at a particular time. For instance, a gig economy worker has the flexibility to sleep in, and then work the rest of the day giving rides to strangers or dropping off meals to them. They can request payment at the end of a day, and then go on vacation the next, since they are not obligated to report directly to anyone. This flexibility has attracted millions of people who now work for themselves and has also proven to reduce the cost of business and dramatically increase efficiency. And these jobs have grown during the pandemic, as traditional jobs have been devastated.

For the past several years, as the gig economy model threatens entrenched, and in some cases, monopolistic operations, efforts have been made to interfere with this linchpin of American ingenuity. New York City was among the first to try to craft laws to target these independent contractors.

When Uber became an exciting and competitive alternative to New York City taxicabs in 2014, it offered its users a cost-effective application that provided free-market competition in an historically taxi-reliant city. The influential New York City Taxi and Limousine Commission became unhappy about the competition that offered the same service at a lower price. So, they decided to pursue an all-out assault on this modern convenience. They lost, but in other cities, Uber and Lyft were either banned or stymied by excessive regulations that made it impossible to be competitive.    

The most oppressive law is AB 5, which does not directly prohibit the digital marketplace companies from doing business. Instead, the law, which was enacted in California in 2019, essentially classifies all independent contractors as company employees. This far-reaching law not only affected the thousands of gig economy workers in the state, but also reclassified other more traditional independent contracting jobs like journalists and writers. Of note, presumptive Democratic presidential nominee Joe Biden wants to extend AB 5 across the country by having Congress pass a similar law.

That is one of many reasons why the language in the HEALS Act is so important. Protecting and providing relief for gig economy workers will establish support for their independence in sharp contrast to AB 5. It will also assure the American people that these ever-important unsung heroes will be safeguarded from government overreach.

Every American should have the right and opportunity to work however he or she sees fit. The products and services these independent contractors perform offer a good deal for the consumer and the platform providers. The heavy hand of big government does not serve the best interests of the American people. The gig economy safe harbor must remain in any version of COVID-19 relief bill that passes Congress.