Trump Administration, Congress to Study Gig Economy Reforms This Year

Trump Administration, Congress to Study Gig Economy Reforms This Year

The Trump administration and the Republican leadership in the US Congress intend to take up the issue of the gig economy this spring and propose labor law reforms to address the unique circumstances of this segment of the workforce, Sean Higgins reports at the Washington Examiner:

The big issue: When do workers for those companies stop being contractors and become employees? Business groups are eager to limit those circumstances, which the Obama administration and court rulings have chipped away at. The Trump [administration] will offer its take when the Bureau of Labor Statistics publishes its Contingent Worker Survey in the spring that will offer new data on workers doing short-term, nonsalaried “gig” jobs. …

A source in the Labor Department who requested anonymity said the study probably will be published in April. It will become a springboard for legislation to clarify a host of issues, including potentially the most controversial one: the contractor-or-employee issue. … The Trump administration has been tight-lipped on its plans, saying only that it wants to modernize the rules.

The Contingent Worker Supplement to the Current Population Survey was reintroduced during the Obama administration by former Labor Secretary Tom Perez in January 2016. Independent estimates of the size of the alternative workforce in the US vary dramatically, whereas the dearth of official data has limited policy makers’ ability to address the challenges created by the advent of the gig economy.

Speaking at an event in October, Labor Secretary Alexander Acosta expressed support for overhauling US employment laws to account for the advent of the gig economy and the changing relationship between workers and employers. The government needs 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 said.

Given the light-touch, pro-employer approach this administration has tended to pursue when it comes to employment law, the forthcoming proposals are unlikely to create many new rights for gig economy workers. While everyone across the political spectrum agrees that the laws need updating to account for the new ways in which people work, there is fierce debate over what those updates should look like. Labor activists want gig economy workers to enjoy the same protections as traditional employees, while 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.

So far, nothing has been done at the federal level to address the inconsistencies between the US’s antiquated labor laws and the new economy. A matter of particular concern is how to ensure freelancers and gig economy workers have access to essential benefits like health insurance, which most Americans get through their employers. Democrats introduced a bill in Congress last year that would create a fund to subsidize the development of portable benefit schemes for independent workers by states, local governments and nonprofits.

Meanwhile, legislation is also being considered at the state level: New York, for example, has been looking at a proposal drawn up by the online home-cleaning company Handy that would enable companies to provide benefits to independent contractors without having them reclassified as employees.

The UK has also been struggling with the question of how to legislate for the gig economy, and recently released a series of proposed reforms to better protect the rights of contingent employees while maintaining the flexibility demanded by businesses and gig workers alike. Labor unions were quick to criticize the proposals, however, as insufficient to the magnitude of the problem facing the British workforce.