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State vs tech giants in battle over gig worker rights

by Futures Centre, Oct 2
2 minutes read

Uber, Lyft and other gig economy giants have launched Proposition 22, a campaign to enable workers to “choose to work as independent contractors with control over where, when, how long and for who they work”, rather than be reclassified as employees with rights. Proposition 22 does offer some protections, including guaranteed minimum earnings, expenses compensation, and health allowances. This is in response to California’s Amendment Bill 5, a Supreme Court ruling that workers for gig companies are entitled to employee benefits. 

man driving vehicle with GPS system turned on

So what? 

Gig economy-based business models have surged with new users and offers in response to restrictions on movement during COVID-19. Their capacity for agile innovation depends partly on their ability to draw on a potentially unlimited workforce, to whom they have few responsibilities. The debate is over whether this loose relationship between gig workers and the tech giants they work for is valued for flexibility, or rather seen as exploitation.

In the US and elsewhere, worker classification is important because it determines if an employer must pay Social Security, Medicare and unemployment tax. Changes in classification and tax frameworks have huge implications for such apps. We are seeing a number of high profile legal cases as workers seek redress with platform companies like Amazon, and increased campaigning for regulations and policies that create a viable safety net for gig economy workers. 

One proposal is to create a third category of worker – the independent worker, sitting between the employed and self-employed categories. Ascertaining and agreeing the rights and protections of such workers will surely take a significant amount of time and be hugely complex, but with nearly half the global workforce expected to fall within the gig economy by 2025, time is short.

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