The coronavirus recession exposes how U.S. labor laws fail gig workers and independent contractors

Fighting for fair working conditions

Like workers at Amazon.com, Inc. (opens in a new tab), Amazon’s grocery store subsidiary Whole Foods (opens in a new tab), and McDonalds Corp. (opens in a new tab), many independent contractors are fighting for better working conditions in this crisis. In late March, independent contractors at Instacart, a service that picks out and delivers groceries to subscribers, held a nationwide strike demanding (opens in a new tab) that the platform provide them with basic protective gear, hazard payment, and a fair sick leave policy. Just a few days before that, workers protested (opens in a new tab) in front of Uber Technologies Inc.’s headquarters in San Francisco, where drivers called for the enforcement of Assembly Bill 5, or AB 5.

Implemented in January 2020, AB 5 closes major regulatory loopholes in U.S. labor law, making it more difficult for employers to misclassify workers as independent contractors. In doing so, the law limits firms’ ability to rely on business models based on low labor costs, holding them accountable for providing their workers with benefits, rights, and protections. Though these efforts to re-classify gig workers as employees have been slow-moving and met with big pushback from gig employers, AB 5 can serve as a model for the nation.

Independent contractors’ lack of the right to form a union or collectively bargain translates into lower earnings, lack of access to benefits, and more exposure to workplace violations such as wage theft (opens in a new tab) and sexual harassment (opens in a new tab). Any attempt to collectively bargain would likely violate the Sherman Antitrust Act, which specifically exempts unions for employees from antitrust rules, but this exemption does not apply to independent contractors. Therefore, if independent contractors banded together to raise their pay, they could be illegally colluding to raise prices—another way that current law actually protects companies (opens in a new tab) from their workers.

Policies to help independent contractors through the coronavirus recession and beyond

For all these reasons, this crisis is expected to worsen the already insecure economic standing of low-wage contractors. But there are things that policymakers can do (opens in a new tab), in addition to passing laws such as AB 5, to make sure that these workers are not left out.

First, this is a public health emergency, but few independent contractors have the right to earn sick leave or medical leave. The Families First Coronavirus Response Act, the first emergency legislation passed by Congress, allows contractors to qualify for a tax credit (opens in a new tab) if they themselves have coronavirus or have certain caregiving responsibilities, but many others must make an excruciating decision between badly needed income and endangering their health and others’ in this pandemic. While more than 75 percent of all workers (opens in a new tab) have access to paid sick leave and paid vacations, no independent contractors have these benefits unless they live in a state which allows them to buy into its paid medical leave system. Establishing these protections for everyone, without regard to employer, would make us all healthier (opens in a new tab).

Second, instead of taxpayers picking up the bill, gig employers should be paying (opens in a new tab) into the Unemployment Insurance system for their workers, as several states require (opens in a new tab). Unemployment still happens to gig workers, and it should be clear that their employers cannot evade this joint responsibility with their workers.

Third, and most importantly, independent contractors need the right to organize themselves into a labor union so they can take collective action to raise their pay, benefits, and working conditions. If they were able to unionize, then gig workers could bargain for more protective equipment to prevent the new coronavirus from spreading the COVID-19 disease to them or from them to others—one of the key demands currently going unmet. The PRO Act, recently passed by the U.S. House of Representatives, would update the law to provide these workers with expanded rights to form a union.

The coronavirus recession has exposed how decades of growing income inequality, the deterioration of worker protections (opens in a new tab), and labor laws hostile to unions render workers and the entire U.S. economy much more vulnerable to public health crises and economic downturns. The recovery from this recession will be both quicker and more complete if policymakers act to help the most vulnerable workers, since the hardest hit are also the ones with the consumer power most needed to help the U.S. economy bounce back. Moreover, doing so permanently will help ensure that on the other side of this recession, our economy is both more equitable and more resilient.

Anyone out of work can find their state unemployment program’s information at this link (opens in a new tab) and determine if they qualify for benefits.