The Work and Pensions and Business Committees in the UK Parliament have unveiled a bill meant to close what its supporters call loopholes in current law that let employers misclassify employees as self-employed as a means of saving labor costs and evading their legal responsibilities to those workers, Sky News reports:
It says personnel should be classed as a “worker by default” to ensure access to basic rights such as sick pay because hundreds of thousands are currently being “burdened” by risks associated with flexible working. …
Labour’s Frank Field, who chairs the Work and Pensions Committee, said: “The two committees are today presenting the Prime Minister with an opportunity to fulfil the promise she made on the steps of Downing Street on her first day in office.” He said the draft Bill “would end the mass exploitation of ordinary, hard-working people in the gig economy.”
Opponents of the bill, such as the Confederation of British Industry, say it is shortsightedly cracking down on all forms of flexible employment. As the CBI’s managing director for people and infrastructure Neil Carberry put it to Sky News: “Based on a very limited review of the evidence, the committees have brought forward proposals that close off flexibility for firms to grow and create jobs, when the issues that have been raised can be addressed by more effective enforcement action and more targeted changes to the law.”
Over at Personnel Today, Jo Faragher digs deeper into the bill, which also recommends:
A British employment tribunal has rejected Uber’s appeal on a case involving the employment status of its drivers. While the popular ride-hailing app believes drivers should be considered self-employed, and insists the vast majority of them prefer it that way, the tribunal has ruled that the drivers are employees and thus entitled to minimum wage, overtime/holiday pay, and other protected benefits.
Uber’s appeal came in response to a tribunal ruling last year which reached the same conclusion. Following this rejection, the company says it will take the opportunity to elevate its case to the Court of Appeals or the Supreme Court. Uber is embroiled in other legal battles in the UK, as the company is also in the process of appealing a ban issued by London authorities, who deemed the service unfit due to “public safety and security implications.”
This case has major implications for the gig economy, the long-term viability of which may be called in question due to the potential closing of this employment loophole. Deliveroo and Addison Lee are appealing similar decisions at the moment in the UK, and a similar case is underway in California involving the food-delivery app GrubHub. Additionally, Uber has settled class-action lawsuits on drivers’ employment status in California and Massachusetts, and other states are following suit. Not being on the hook for benefits and regular wages has helped gig economy companies grow at scale while keeping labor costs low and making it easier to deal with fluctuating demand for their services.
In a San Francisco courthouse, US Magistrate Judge Jacqueline Scott Corley recently heard closing arguments in a case brought against GrubHub by former food delivery driver Raef Lawson, challenging the platform’s gig economy business model and claiming protections for drivers as employees under California law. Corley’s ruling in this case is highly anticipated, as she will be the first US judge to weigh in on whether gig economy workers like Lawson have a right to those protections—while Uber and Lyft have both faced similar lawsuits, both of the ride-sharing platforms settled these disputes out of court.
Lawson is represented by Shannon Liss-Riordan, the same Boston-based attorney who pressed the cases of the Uber and Lyft drivers and is also challenging the independent contractor status of gig economy workers at other platforms. SF Gate’s Joel Rosenblatt looked in on the GrubHub case last week:
As the first case of its kind in the U.S., the GrubHub trial “will inevitably be treated as a bellwether,” said Charlotte Garden, an associate law professor at Seattle University. “That’s especially true because the lawyers in this case are also involved in other larger and higher profile misclassification cases, including the Uber case,” said Garden, who has followed the Uber litigation closely.
It never hurts to be reminded that not everything you hear about millennials is true: In fact, most stereotypes about this generation turn out to be incorrect. Looking at US and European labor market data, the Economist is the latest to realize that in the US at least, millennials aren’t doing much job-hopping after all:
Data from America’s Bureau of Labour Statistics show workers aged 25 and over now spend a median of 5.1 years with their employers, slightly more than in 1983 (see chart). Job tenure has declined for the lower end of that age group, but only slightly. Men between the ages of 25 and 34 now spend a median of 2.9 years with each employer, down from 3.2 years in 1983.
This finding is old news to readers of Talent Daily or our research at CEB, now Gartner: A Pew study debunked the millennial job-hopper based on Labor Department data earlier this year, whereas a Namely survey released this summer found that tenures were shortening, but that older employees were job-hopping as much as millennials were.
What our research has found is that millennials do value a range of experiences early in their careers, but don’t necessarily feel the need to change jobs as long as they are getting that range of experiences and building that range of skills with one employer. As such, they value employers with significant internal mobility and internal labor markets, and if they are hopping from one organization to another, it’s because the first organization wasn’t meeting their needs in terms of learning and growth opportunities. This is one of several millennial myths we busted in our research back in 2014.
The annual Freelancing in America survey, released this week by Upwork and the Freelancers Union, paints a picture of a freelance workforce that is growing much faster than the US workforce in general. The report estimates the total number of US freelancers today at 57.3 million, or 36 percent of the total American workforce. That number has grown more than three times faster than the overall workforce in the past three years, and if this rate of change holds, freelancers are projected to compose a majority of the US workforce by 2027. Millennials are leading the trend in this direction, with 47 percent of millennial workers saying they freelanced.
The survey of over 6,000 US adults also finds that freelancers are doing better than their traditionally employed peers at preparing themselves for their professional futures: 55 percent of freelancers said they had engaged in some kind of re-skilling activity in the past six months, compared to 30 percent of regular workers. In general, 65 percent of freelancers said they were updating their skills as work evolved, while just 45 percent of others said so.
Freelancers are also feeling the impact of technological change more acutely, with 49 percent saying their work had already been affected by AI and robotics, against just 18 percent of full-time employees. At the same time, technology is also bringing them more work, with 71 percent saying the amount of work they had found online had increased in the past year.
Another interesting finding is that while many people lump freelancers in with the gig economy, freelancers don’t: Only 10 percent of freelancers in the survey said they considered themselves a part of that economy. Indeed, we’ve seen from other research that the gig economy, properly speaking—meaning workers who make a living through platforms like Uber—is just one component of the new trend toward contingent and temporary employment in the US labor market. Fast Company’s Ruth Reader considers why freelancers might be rejecting the “gig economy” label:
The Swedish flatpack furniture and home goods giant Ikea announced on Thursday that it had agreed to acquire TaskRabbit, an online gig economy marketplace where customers can hire freelance help with day-to-day chores. According to Recode’s Kara Swisher and Theodore Schleifer, the acquisition “was fueled by Ikea’s need to further bolster its digital customer service capabilities” in order to keep up with major competitors like Amazon:
The purchase is Ikea’s first step into the on-demand platform space. TaskRabbit had already struck a pilot partnership with Ikea around furniture assembly in the United Kingdom and also had marketed its workers’ ability to put together Ikea items in the U.S. and elsewhere.
But a purchase of TaskRabbit will get Ikea even more deeply into the tech space, although it has not been without some tech innovation of late. The company — which has sales of more the $36 billion annually and 183,000 workers — recently announced an initiative to shift its 389 stores worldwide to electric car transportation and infrastructure.
TaskRabbit has only 65 employees, but some 60,000 “taskers” use the platform, which allows them to specify their own hourly rates for everything from handyman work to moving services to home cleaning. None of its employees will be laid off in the acquisition, the New York Times reports, and TaskRabbit plans to expand. That’s not surprising, given that the market for on-demand household help is growing overall:
London Taxi Protest Against Uber in 2016 (Dinendra Haria/Shutterstock.com)
In a bombshell decision last October, a UK employment tribunal ruled that Uber drivers were employees of the ride-sharing platform, not independent contractors as Uber contends, and as such had the right to paid vacation and a minimum wage. Uber immediately appealed the ruling. On Wednesday, less than a week after losing its license to operate in London, the company was back in court to plead its case for why the court’s understanding of its labor model is misguided, Reuters reports:
At the two-day appeal hearing starting on Wednesday, Uber said its drivers were self-employed and worked the same way as those at long-established local taxi firms. The self-employed are entitled to only basic protections such as health and safety, but workers receive benefits such as the minimum wage, paid holidays and rest breaks. This would add to Uber’s costs and bureaucracy across Britain.
“The position of drivers who use the App is materially identical to the (familiar and long-established) position of self-employed private hire drivers who operate under the auspices of traditional minicab firms,” Uber said in its court submission. Minicabs, or private hire vehicles, sprung up in Britain more than 50 years ago. Minicabs cannot be hailed in the street like traditional taxis, but can be booked for specific times and places via a registered office with a call or via the internet.
The comparison to minicab companies is not going over well with Uber’s UK critics, Bloomberg’s Jeremy Hodges notes, as the company had previously argued before the tribunal that it was a technology company, not a transportation company, and played no role in the transport business beyond connecting its self-employed drivers to customers: