On the (mis)classification of paid labor: When should gig workers have employee status?

Abstract

The emergence of so-called ‘gig work’, particularly that sold through digital platforms accessed through smartphone apps, has led to disputes about the proper classification of workers: Should platform workers be classified as independent contractors (as platforms typically insist), or as employees of the platforms through which they sell labor (as workers often claim)? Such disputes have urgency due to the way in which employee status is necessary to access certain benefits such as a minimum wage, sick pay, and so on. In addition, classification disputes have philosophical significance because their resolution requires some foundational account of why the law should make a distinction between employed and freelance workers in the first place. This paper aims to fill this foundational gap. Central to it is the idea that employment involves a worker ceding certain freedoms in return for a degree of security, at least with respect to income. Insofar as the misclassification objection has force against digital platforms, it is when a platform is attempting to have it both ways: Workers are giving up freedom but not being granted a proportionate increase in security. As I shall explain, this approach offers some flexibility as to how actual disputes might be resolved – justice may be indifferent between whether platforms offer greater security or permit workers greater freedom, provided they do at least one of these things.

Gig Workers, Social Protection and Labour Market Inequality: Lessons from Malaysia

“…From a labour law perspective, status as an employee entitles the employee to collective bargaining rights, the adaptation of various laws (Labour Standards Act, Minimum Wage Act, Family Law, Disability Protection Act, overtime pay, etc.) and benefits (medical insurance, pension) (Halliday 2021;Oei 2018). However, the majority of gig workers sign service contracts with platform firms as independent contractors, not employees (Harpur & Blanck 2020).…”

“…Furthermore, they cleverly utilise the employment classification gimmick of an independent contractor, which takes into account the legal flexibility of gig workers whilst reducing the employer's obligations. Previous scholars have argued that this binary categorisation has allowed for the misclassification of gig workers (Dubal 2017;Halliday 2021;Pinsof 2015). The gig economy has moved from the traditional two-party (client and independent contractor) labour relationship to a three-party labour contract mediated by the platform (Figure 1).…”

Challenging the IC Theory: Suggestions for Some Ways Forward

“…Gig work is made up of short-term jobs (gigs) and presents a type of contingent work that typically falls outside the boundaries of an organizational purview. Digital platforms connect gig workers directly with customers and clients (Harris, 2017), and therefore gig workers are rather classified as independent contractors than as employees (McDonnell et al, 2021;Halliday, 2021). In the gig economy, organizations do not hire workers, but rather mediate an exchange between gig workers and customers with all work and requested tasks managed by algorithm (McDonnell et al, 2021).…”

“…This allows for flexible arrangements as independent contractors, working only for a defined time, are able to complete a particular task without the need for connection with an 'employer' (Friedman, 2014). However, since gig workers have no traditional employment relationships with organizations (Halliday, 2021;Friedman, 2014), managing this workforce may become a considerable challenge. These on-demand, 'hired' workers may feel disconnected to an organization resulting in diminished loyalty to any organization.…”

Workers’ voice from the triangular employment relationship lens: towards a conceptual framework

“…has implications for HRM Temporary agency's responsibilityMeijerink and Arets, (2021),Howcroft and Bergvall-Kareborn (2019) andHalliday (2021) …”