Acosta Wants Updated US Labor Laws to Address Gig Economy

Acosta Wants Updated US Labor Laws to Address Gig Economy

At an event organized by the Jack Kemp Foundation last week, US Secretary of Labor Alexander Acosta expressed support for a speedy overhaul of US employment laws to account for the advent of the gig economy and the changing relationship between workers and employers today, Chris Opfer reported at Bloomberg BNA. The secretary said the government needed to “keep pace with the pace of change in the private sector” and “re-examine the rules that regulate the employer-employee relationships that have an impact on the ability of individuals to work in a modern system.”

Acosta’s concern reflects a growing understanding that the employment laws and regulations written in the 20th century don’t account for the way many people work today and in particular, that some new form of employment classification may be needed to reflect the situation of people like Uber and Lyft drivers, who work as independent contractors but resemble regular employees in many aspects. The rights and obligations of these individuals and the platforms through which they find work are currently a legal gray area, being defined in the courts through litigation rather than by Congress.

That US employment laws need updating to account for today’s very different labor economy is not especially controversial, but what those updates should look like is hotly debated: Labor activists want gig economy workers to enjoy the same protections as traditional employees and progressive gig economy companies want a new social safety net for these workers based on portable benefits, whereas other businesses and lobbying groups want to limit regulation of this emerging economy as much as possible.

Acosta, whose political positions make him a pretty typical pro-business conservative, is not necessarily looking to radically expand the rights of Uber drivers. He has also indicated reluctance to compensate for Congressional inaction, as the Obama administration did, by using the rule-making powers of executive agencies to reinterpret existing employment laws. Not that Acosta is opposed to using these powers altogether: His Labor Department is appealing the court ruling that struck down the previous administration’s overtime rule out of concern that the judgment could hinder it from setting a salary threshold for overtime eligibility.

Unfortunately for Acosta, there is little chance of the current Congress taking up a controversial revision of employment law, as the Republican majority struggles to make progress toward its goals of health care and tax reform. A bill was introduced earlier this year by Democrats that would promote the portable benefits model for independent workers, which was endorsed by gig economy companies Postmates, DoorDash and Lyft, as well as by the Freelancers Union, but has not gained much traction in the legislature.

In the meantime, states are moving ahead with their own experiments at regulating the gig economy, such as a New York bill based on a draft circulated by the online home-cleaning company Handy at the beginning of the year that would open the way for gig economy businesses to more easily provide portable benefits to their not-quite-employees. Employers are also cognizant of this problem and looking at ways to provide these benefits, whether or not governments begin mandating them.