August 22, 2022

Federal Bill Could Settle Worker Classification Debate for Gig Workers

The U.S. House of Representatives recently introduced House Resolution 8442, which proposes changing the term “employee” within the Fair Labor Standards Act to create an exemption for individuals who enter a worker-flexibility agreement.

While there is detailed language as to what defines a worker-flexibility agreement, the language could be applied to various types of gig work.

At this time, it is known that such agreements would include on-demand, app-based work, including individuals working for companies such as Lyft, Uber, DoorDash, GrubHub, Instacart, and more.

However, the gig economy doesn’t just include app-based workers. It can be characterized as an environment of short-term jobs or temporary contracts, which can also include freelancers, temp workers, contract workers, and other nontraditional work arrangements. Gig work durations can vary from a few minutes to over a year, and can include traditional labor such as manufacturing, IT jobs, retail, office work, and transportation.

If such worker-flexibility agreements are set up before work begins, then theoretically there are a multitude of gig jobs where a worker would not be considered an employee. If made into law, this bill would essentially settle the debate of worker classification for gig workers by creating a national policy.

While gig workers would still have rights such as privacy, nondiscrimination, and protection against harassment and retaliation, etc., these individuals who enter worker-flexibility arrangements would not be considered employees and would not be entitled to benefits and rights such as workers’ comp and minimum wage.

Healthesystems has covered the ongoing dialogue regarding worker classification in the gig economy, as many states have gone back and forth on whether certain gig workers should be classified as employees or independent contractors.

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