The Question of Discrimination in the Gig Economy

San Francisco employment attorney Aaron Minnis explains how employment discrimination laws apply in the gig economy

As the economy evolves to meet changing demands of workers and employers, San Francisco employment discrimination attorneys are challenged to apply discrimination and other employment laws to economic models that did not fit squarely within the ordinary employment context. Aaron Minnis, an employment discrimination lawyer at Minnis & Smallets, recently discussed those challenges when he was interviewed for an article about the gig economy that appeared in the Spring 2017 issue of San Francisco Attorney.

Defining the Gig Economy

The word “gig” was popularized by musicians who used it to describe a paid appearance at a music venue (as in, “I’m playing a gig at The Saloon tonight”). The word was later co-opted to refer generally to freelance or short-term jobs.

The term “gig economy” does not have a legal definition, but it usually refers to those jobs in the economic marketplace that are on-demand or temporary in nature. It is closely related to “sharing economy,” another term that does not have a legal definition.

Both terms are typically used in connection with workers who are connected to consumers looking for goods and services using the web or an app, such as a ride-sharing app. As Minnis told San Francisco Attorney, “you don’t have to build your own business; the apps are giving you your clientele.”

The segment of the labor market that works in the gig economy is usually paid for performing individual tasks, such as driving a passenger to a destination or delivering a package. Workers in the gig economy often provide services to more than one business. Some even perform different kinds of services, performing various tasks according to the worker’s own schedule.

Benefits of the Gig Economy

There are numerous benefits to workers in the gig economy. “The positives include a more flexible schedule, more variety of tasks and clients, lower barrier of entry, and opportunities to work in new areas,” Minnis told San Francisco Attorney. Being part of the gig economy allows workers to take their jobs with them when they move or to explore different fields in which they might want to work.

Still, the gig economy isn’t for everyone. Minnis explained that workers in the gig economy may need to hustle to find jobs. “Workers must be self-starters, self-motivators who manage their own schedules,” Minnis said. Workers who want to be their own boss, however, may enjoy the freedom that the gig economy provides.

Unsettled Questions in the Gig Economy

A question that often arises in the gig economy is whether a worker is an employee or an independent contractor. Employees are entitled to the benefits and protections of certain employment laws, including laws that prohibit employment discrimination and that require employers to pay minimum and overtime wages. Independent contractors, on the other hand, do not have the right to unionize, do not receive an employer’s contribution to social security taxes, and are not entitled to workers’ compensation or to benefits (such as retirement or health insurance) that the employer offers to its employees.

Laws that regulate the employment relationship, including employment discrimination, collective bargaining, and wage and hour laws, were implemented long before the gig economy existed. Some legislators are asking whether those laws need to be revised to extend certain protections to workers in the gig economy. For now, however, San Francisco employment lawyers must decide how existing laws fit within the framework of the gig economy.

Misclassification of Workers

Hiring independent contractors can help businesses save money and avoid liability under various employment laws, including those against employment discrimination. At the same time, hiring employees gives businesses greater control over the work that is performed. Disputes arise when businesses misclassify employees as independent contractors.

As Aaron Minnis explained to San Francisco Attorney, the “California Labor Code assumes an individual is an employee and the burden shifts to the employer to prove otherwise.” Placing an “independent contractor” label on a worker, or asking the worker to sign an independent contractor agreement, is not determinative of the worker’s status. Rather, California courts have established a test that focuses on several factors to determine whether a worker is properly classified as an employee or an independent contractor. One of the most important of these factors is whether the business has a right to control over how the worker performs the job.

Misclassification and Discrimination

Important federal and state laws prohibit employers from discrimination against employees because of characteristics such as race, sex, national origin, disability, sexual orientation, age, and religion. Since laws prohibiting discrimination and workplace retaliation do not apply to independent contractors, it is important for workers in the gig economy to determine whether they are properly classified as independent contractors.

When a business sets a worker’s schedule, dictates where and how the worker will perform job-related tasks, supplies tools or equipment for the worker to use, or does not allow the worker to work for anyone else, a court might conclude that the worker is an employee who has been misclassified as an independent contractor.

Every case is different and each case turns on its unique facts. The San Francisco employment discrimination lawyers at Minnis & Smallets can advise workers in the gig economy about potential remedies if they have been subjected to workplace discrimination or retaliation. To talk to an employment attorney about your situation, call 1-415-551-0885 or ask for an appointment by using our online contact form.