In Letter to Labor Secretary Senators Casey and Franken Urge Government to Ensure Workers Are Not Being Improperly Classified as Contractors, Which Would Disqualify Them from Vital Workplace Protections
Washington DC- U.S. Senators Bob Casey (D-PA) and Al Franken (D-MN) have pressed the Department of Labor on protections for workers in the so-called “gig” economy. As on-demand, app based businesses have taken an increasing role in the economy important questions about worker classifications, workers’ compensation and retirement benefits have arisen. In a letter to Labor Secretary, Thomas Perez, Casey and Franken pressed the agency to examine this trend and determine whether workers were being improperly classified as contractors and losing important workplace protections.
The on-demand economy has been an important source of jobs and innovation. At the same time, we need to carefully consider the potential misclassification of workers and its ramifications,” the Senators wrote to the Department of Labor. Later they continued, “These workers do not receive benefits and safeguards such as unemployment insurance, workers’ compensation, and retirement benefits. As the workplace and our definition of workers evolve away from traditional employment models, we must ensure that we take appropriate steps to protect the new workforce, which is key to preserving a strong middle-class.”
Full text of the letter can be viewed here or below:
Dear Secretary Perez:
We are writing to you regarding the classification of workers in the new on-demand economy. In the on-demand economy, also known as the “gig economy,” businesses who largely rely on independent contractors use online and app-based platforms to provide services. The on-demand economy has been an important source of jobs and innovation. At the same time, we need to carefully consider the potential misclassification of workers and its ramifications.
Today, about 50 million workers – one-third of the workforce – are classified as independent contractors, freelancers, or temporary workers. This number is predicted to grow to 60 million workers – 40 percent of the workforce – by 2020. These workers do not receive benefits and safeguards such as unemployment insurance, workers’ compensation, and retirement benefits. As the workplace and our definition of workers evolve away from traditional employment models, we must ensure that we take appropriate steps to protect the new workforce, which is key to preserving a strong middle-class.
We therefore ask that the Department of Labor provide clarification to current classification guidelines in order to help employers determine the appropriate designation of its workers within the on-demand economy. These necessary updates will also help workers understand their status and rights under the law.
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