Congress should modernize the distinction between full-time employees and independent contractors when it comes to the gig economy, according to an announcement by the Information Technology and Innovation Foundation, a technology think tank.
“The US labor market has diversified considerably in recent decades, and more workers now fall somewhere between full-time employees of a single company and freelance contractors serving their own set of customers,” said Joseph Kennedy, senior fellow at the foundation and author of a report on independent contract status and the Gig Economy .
“Although Internet platforms like Uber and TaskRabbit still represent only a small fraction of this intermediate market, their rapid growth has shined a bright light on the shortcomings of current labor law,” Kennedy said. “There is a clear need for Congress and the states to reform the country’s outdated law by either adapting it, fixing it, or suspending it.”
Kennedy’s report outlines his three ways to fix the laws:
Adapt. Create a new category of worker between full-time employee and independent contractor. The possible drawback would be instead of two rigid categories, employee or independent contractor, there would be three rigid categories.
Fix, Revisit and fix the country’s major labor laws. The drawback here is this would be a long, difficult political process.
Suspend. Temporarily carve out exemptions for gig economy firms.
However, Kennedy cautions these changes wouldn’t solve the entire problem because each state also has its own labor laws.
“Without similar changes at the state level, many of the benefits of reform would remain out of reach,” he writes.