Gig Economy: Workers are Employees or Not

The excessive intrusion of technology in the world of work is changing employer-employee relationships world over. To strip workers of their rightful wages and social security benefits, mobile application based internet companies are labeling them as independent contractors or service provider partners. While the labour courts have, in several cases, ruled in the favour of workers, the gig economy lobby is rigorously fighting back. Multinational companies like Uber, Deliveroo etc., are filing appeals in Apex Courts against unfavourable orders by the Appeals Courts which have held them responsible as employers in Brazil and UK.

Netherland has initiated an investigation against the bogus self-employment contracts in the gig economy  – The Dutch government has launched an enquiry into the strategy of employing workers on bogus self-employment contracts despite working full time for companies like Uber or Deliveroo in the gig economy. The investigation comes after several weeks of strike action by Deliveroo workers against the company’s move to replace all employees on legitimate contracts with “self-employed” workers.

While a US court has held Grubhub drivers to be independent contractors – In a significant judgment, on the status of recognition of gig economy workers as workers, U.S. Magistrate judge in San Francisco, held that drivers for GrubHub Inc. are independent contractors and not employees on 8 February 2018. The case against GrubHub was brought by Raef Lawson, a part-time worker, working as a food-delivery driver for who was blocked from Grubhub’s smartphone app in 2016 for not making deliveries while he was signed on. Lawson claimed the company violated California labor laws by not reimbursing his expenses, paying him less than minimum wage and failing to pay overtime. In its defense Grubhub had argued that workers were not central to its business since it is a software development company and not a food delivery service.

According to the order the company’s complete lack of control over how the worker performed deliveries meant he they were independent contractors and thus did not qualify for the protections of employees under California law.

The decision would impact the gig economy workers by influencing a series of lawsuits which are being fought across the country in which Uber, Lyft, and other companies are trying to establish the workers as independent contractors and systematically depriving them of their rights and escaping from paying millions of dollars towards wages and social security benefits.

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