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Department of Labor Finds That Gig Workers Are Contractors, NOT Employees


Stop me if you have heard this before:  Gig workers have long argued that they are employees, not contractors, and therefore are entitled to the protections afforded under the Fair Labor Standards Act ("FLSA").  (For those readers that have been following along over the past few years, this argument should not come as much of a surprise.  After all, the Department of Labor has previously been thought to being ready to weigh in on the issue before...as has the Ninth Circuit Court of Appeals, a UK Court of Appeal, and a New York State Labor Review Board, among others.)

Well on Monday, the Department of Labor issued an opinion letter in which it said that gig workers at an unidentified company were contractors and therefore not employees entitled to the protections afforded under the FLSA.  (This particular company "connects service providers to end-market consumers to provide a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting, and household services."  The "issue" addressed here is whether the company was correct in classifying these gig workers as independent contractors rather than employees.)

One of the reasons pinpointed by the Department of Labor as to why these gig workers were contractors rather than employees was the fact that these workers had a great deal of control over their own work.  These gig workers were not requited to perform a minimum number of cleaning jobs, were allowed to sign up with other competing companies (or work directly with customers), and allowed these gig workers to ask for higher pay than had previously been set.  Now as some have noted, gig workers that work for Uber, GrubHub, Lyft, etc. have a different working relationship than what was addressed by the Department of Labor in this opinion letter.  (For instance, Uber & Lyft drivers have work rates that are determined by these companies' policies, could risk not being able to drive for Uber or Lyft if a driver rating falls below a certain threshold, etc.)

Now some readers might ask what binding precedential value this Department of Labor opinion letter holds.  I will preface this with a note that the opinion letter is not the be all, end all for either side's argument.  However, while the opinion letter is not binding in a court of law, it serves to add further ammo to the argument of those who seek to classify gig workers as contractors rather than employees.  With a Department of Labor under President Donald Trump that has tended to favor employers in recent years, I would expect similar employer friendly opinion letters going forward (should the Department of Labor delve further into the gig worker contractor v. employee dispute.)


For a copy of the Department of Labor's opinion letter:  https://www.dol.gov/whd/opinion/FLSA/2019/2019_04_29_06_FLSA.pdf
 

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