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The Coming Gig Economy Union

By Heather Kerrigan | Dec 2, 2019

There is a growing nationwide movement to establish a gig economy union that would grant independent contractors the same rights that their unionized counterparts in more traditional jobs already have. Whether the proposals playing out in places like California and New York and among 2020 presidential candidates will come to fruition is unclear, but unions are becoming more vocal about the benefits of membership for this growing sector of the American workforce.

The Rise of the Gig Economy

An estimated one-third of the American workforce is currently engaged in gig work. According to a study of freelancers, a majority of the U.S. workforce will consist of contract workers by 2027. In large part, rapid growth in the gig economy stems from emerging technologies that can easily connect consumers with the products and services they need. However, it also stems from a growing desire by companies to rely on independent contractors. When a worker isn't classified as an employee, a company is not legally required to give them health insurance, retirement, paid leave, sick time or even a minimum wage and certain taxes.

In May, the National Labor Relations Board concluded that some gig workers­ (in this case, UberX and UberBlack drivers), are independent contractors, not employees. This distinction, which many believe applies to the larger gig workforce, means that these individuals are not protected under the National Labor Relations Act — the statute that, among other things, allows workers to form or join unions. Similarly, according to recent Department of Labor opinion, gig workers are also not subject to the Fair Labor Standards Act, which guarantees minimum wage and overtime pay.

Unionization Proposals 

Those federal findings likely won't be the last word on gig worker classification, but attempts to broaden their rights have thus far had mixed results. A 2015 Seattle law allowing gig workers to unionize was struck down by a federal court, which ruled that only states have the power to grant such rights to workers, not local governments. 

In turn, some states are amending their own laws on who qualifies as an employee. Such presumptive employee status laws assume that gig workers are employees rather than independent contractors unless the employer can prove otherwise. California has taken perhaps the biggest step toward protecting gig workers when on September 18 the governor signed AB5, a law that will limit the use of independent contractor status to afford more gig workers the full rights and benefits of employment, which will include the right to unionize. A similar proposal, the Workplace Democracy Act, was introduced in Congress that would require all employers to apply the AB5 test to determine whether an employee is an independent contractor.

In New York, in the waning days of the legislature's session, two assembly members introduced a bill to give gig economy workers the right to unionize and collectively bargain by creating a new classification of worker known as the "dependent worker." That bill did not receive a vote before the legislature adjourned, but support from the governor and some large unions for such a measure indicate that it may be brought up in a future session. 

On the 2020 campaign trail, a number of candidates have also expressed support for broader measures that protect workers and allow them to unionize. Mayor of South Bend, Indiana, and presidential hopeful Pete Buttigieg released a plan to prevent gig economy companies from classifying all employees as independent contractors. The plan would allow these workers to join unions and penalize companies for interfering with union organizing activities. 

Unionization Side Effects 

One question unions must address is how they would organize a disparate workforce that often doesn't see colleagues face to face or even interact with them at all. Despite this, gig workers seem interested in the benefits of a gig economy union. A survey of ride-hailing drivers in Los Angeles found that 4 in 5 drivers want the ability to negotiate their contracts and to access benefits like health care.

If reclassified as employees — or otherwise given the opportunity to unionize — gig workers would be protected under labor law and enjoy benefits a union can offer through collective bargaining. These include higher wages, safe work environments, protection from workplace discrimination and harassment, access to retirement funds or unemployment insurance, and paid leave and sick time. Gig workers would likely also gain employer-sponsored health insurance, which the Bureau of Labor Statistics reports that three-quarters of full-time gig workers don't have.

States and the federal government are likely to continue grappling with the classification of gig workers, which means the rights afforded to these individuals may be disputed for the foreseeable future. Unions should stay aware of these proposals and opinions to determine how best to position themselves for a possible gig economy union. 

With 15 years' experience writing for publications including The Wall Street Journal, Barron's, The Christian Science Monitor and Newsday—Deborah Blumberg specializes in business and finance and health and wellness. She writes about topics including corporate communications, financial markets, real estate, renewable energy, cancer, health education, nutrition, supplements, the microbiome and functional medicine. She was a Knight Center fellow and a Donald W. Reynolds National Center for Business Journalism fellow. Her time working in marketing and communications at JPMorgan Chase taught her how to best tell a company's story. She's adept at turning complex ideas into compelling copy. She's also an officer of the American Society of Journalists and Authors (ASJA) and a Women in the Visual and Literary Arts board member, and she is fluent in Spanish.