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Ramaswamy presents an analytical discussion of the problem of non-standard employment and labour law in the US Gig economy. The ‘gig economy’ and the emergence of precarious nature of work have been at the centre of legal challenges to labour management practices followed by companies like Uber. Focusing on the employee versus independent contractor distinction in the US labour laws, this chapter draws our attention to challenges posed by new technologies to standard labour law definition of employees and the associated provision of social security benefits. Learning from this complex debate is argued to be critical for India undergoing economic transformation and services-led growth.
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Throughout this chapter, British spelling is used. Consequently, the word ‘labour’ in the original American sources has been spelt as labour to maintain consistency.
See New York Times, 12 July 2015. https://www.nytimes.com/2015/07/13/business/rising-economic-insecurity-tied-to-decades-long-trend-in-employment-practices.html. Accessed June 10, 2018.
Similar developments have also taken place in the European Union. See Maselli et al. ( 2016). We are not going into the European Union cases in this chapter.
See Maselli et al. ( 2016) for more examples and discussion of definitional issues of on-demand economy.
A 2014 survey conducted by The Freelancers Union identifies more than 53 million Americans, or roughly 34 per cent of the labour force, doing at least some freelance work. (Cited in Hamilton project 2016).
Katz and Krueger ( 2016) have reported a significant rise in the incidence of alternative work arrangements in the US economy from 2005 to 2015 based on a survey of contingent workers in 2015. The percentage of workers engaged in alternative work arrangements is estimated to have increased from 10.7 per cent in February 2005 to 15.8 per cent in late 2015.
A working paper by Jackson, Looney and Ramnath at the US Treasury Department contains detailed estimates of individuals who earn income outside of the employee-employer relationship, for example, not from wages. See Jackson et al. ( 2017).
See Singh ( 2015) for a detailed and critical discussion on the definition of a worker in the Indian labor law and the judicial interpretations.
Discussion in this paragraph is borrowed from Carlson ( 2001).
See Fact Sheet 2016 of The Department for Professional Employees, a coalition of 24 national unions in the US, available at their website http://dpeaflcio.org/programs-publications/issue-fact-sheets/misclassification-of-employees-as-independent-contractors, accessed on 2 June 2018.
Other cases involve companies like Lyft and Grubhub among others. See Sprague ( 2015) for a discussion.
This account is based on the discussion in (Izvanariu 2016), who has discussed the ride-share company cases in greater detail. Several other legal scholars have also discussed the problem of misclassification problem in ride-sharing companies like Uber and Lyft.
A ‘class action lawsuit’ is one in which a group of people with the same or similar injuries caused by the same product or action (say employment practices) sue the defendant as a group. Most class action suits are resolved through settlements in the US.
Deknatel and Hoff-Downing ( 2015) mention that the State of Massachusetts used the ABC rule way back in 2004.
The original source for this information is Kim ( 2018). However, it is available in many other reports not cited here.
Points in this paragraph is largely borrowed from Kennedy ( 2016, 2).
Seth Harris of Cornell University and Alan Krueger of Princeton University propose the creation of a new legal category of workers, to be called ‘independent workers’ in their working paper commissioned by the Hamilton Project at the Brookings Institution. See Seth and Krueger ( 2015).
Portability idea is also suggested by Lawrence Summers. See Hill ( 2015) for further details.
See Live Mint story available at https://www.livemint.com/Companies/ck6h9KKDL9Aw1SCgzvMLRM/The-building-of-UrbanClap-one-ondemand-service-at-a-time.html. Accessed 14 June 2018.
“India is the second country in the world where freelance work is on the rise after the US”, says a report by Truelancer, a global freelancing marketplace (Khetarpal 2016).
See the discussion by Alok Prasanna Kumar (Kumar 2017a) in “Analysis: Ola’s contract with drivers shows they’ve got a raw deal”.
A case is pending in Delhi High Court filed by Delhi Commercial Driver Union that has raised the question of workman status of Ola and Uber Drivers (Mandhani 2017).
The details are available at the EPFO website. https://epfindia.gov.in/site_en/For_Employers.php?id=sm1_index.
The pension scheme is financed by transferring 8.33 per cent of the employers’ contribution from the provident fund.
See also the article written by a Supreme Court Advocate Kumar ( 2017b).
Abraham, Katherine, John Haltiwanger, Kristin Sandusky, and James Speltzer. 2017. “ Measuring the Gig Economy: Current Knowledge and Open Issues.” Presentation for the Society of Labour Economists, May 2016. http://conference.iza.org/conference_files/Statistic_2017/abraham_k16798.pdf. Accessed on 24 April 2018.
Carlson, Richard. 2001. “Why the Law Still Can’t Tell an Employee When It Sees One and How It Ought to Stop Trying.” Berkeley Journal of Employment and Labour Law 22(2): 295–368.
Deshpande, L.K., Alakh N. Sharma, Anup K. Karan, and Sandip Sarkar. 2004. Liberalization and Labour: Labour Flexibility in Indian Manufacturing. New Delhi: Institute for Human Development.
Deknatel, Anna, and Lauren Hoff-Downing. 2015. “ABC on the Books and in the Courts: An Analysis of Recent Independent Contractor and Misclassification Statutes.” Journal of Law and Social Change 18(1): 53–58.
Edelstein, Stephen. 2018. “ Federal Judge Rules that Uber Drivers Are Contractors Not Employees.” http://www.thedrive.com/news/20098/federal-judge-rules-that-uber-drivers-are-contractors-not-employees. Accessed on 24 April 2018.
Eidelson, Josh. 2017. “It’s a New Game for Uber Drivers if New York Passes This Law.” Bloomberg, January 10. https://www.bloomberg.com/news/articles/2017-01-10/it-s-a-new-game-for-uber-drivers-if-newyork-passes-this-law [ https://perma.cc/CN5G-566S/]. Accessed on 24 April 2018.
Eisenbrey, Ross, and Lawrence Mishel. 2016. “Uber Business Model Does Not Justify a New ‘Independent’ Worker Category.” Economic Policy Institute Report, 17 March. https://www.epi.org/publication/uber-business-model-does-not-justify-a-new-independent-worker-category. Accessed on 4 May 2018.
Employment Law Alliance. 2013. “Principal Employer Not Responsible for Provident Fund Contributions with Respect to Contract Workers when the Contractor has Ultimate Control over the Affairs of its Establishment.” Employment Law Alliance, 16 January. https://www.employmentlawalliance.com/firms/trilegal/articles/principal-employer-not-responsible-for-provident-fund-contributions-with-re. Accessed on 8 May 2018.
Hill, Steven. 2015. “New Economy, New Social Contract: A Plan for a Safety Net in a Multiemployer World.” New America Report. https://static.newamerica.org/attachments/4395-new-economy-new-social-contract/New%20Economy,%20Social%20Contract_UpdatedFinal.34c973248e6946d0af17116fbd6bb79e.pdf. Accessed on 25 April 2018.
Izvanariu, Pamela A. 2016. “Matters Settled but Not Resolved: Worker Misclassification in the Rideshare Sector.” DePaul Law Review 66(1): 133–173.
Jackson, Emilie, Adam Looney, and Shanthi Ramnath. 2017. “The Rise of Alternative Work Arrangements: Evidence and Implications for Tax Filing and Benefit Coverage.” Office of Tax Analysis, Working Paper 114. https://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/WP-114.pdf. Accessed on 26 April 2018.
Katz, Lawrence F., and Alan B. Krueger. 2016. “The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015.” NBER Working Paper No. 22667. http://www.nber.org/papers/w22667. Accessed on 20 May 2018.
Kennedy, Elizabeth J. 2017. “Employed by an Algorithm: Labour Rights in the On-Demand Economy.” Seattle University Law Review 40(3): 987–1048.
Kennedy, Joseph V. 2016. “Three Paths to Update Labour Law for the Gig Economy.” Information Technology and Innovation Foundation (ITIF) Report, 18 April. http://www2.itif.org/2016-labor-law-gig-economy.pdf?_ga=2.122194571.1005089633.1541072021-1238563074.1541072021. Accessed on 24 April 2018.
Khetarpal, Sonal. 2016. “On-Demand Workforce.” December 26, 2016. https://www.businesstoday.in/storyprint/243031. Accessed on 15 June 2018.
Kim, Timothy. 2018. “The Dynamex Decision: The California Supreme Court Restricts Use of Independent Contractors.” Labour & Employment Law Blog. https://www.labouremploymentlawblog.com/2018/05/articles/class-actions/dynamex-decision-independent-contractors/. Accessed on 2 May 2018.
Kumar, Alok Prasanna. 2017a. “Analysis: Ola’s Contract with Drivers Shows They’ve Got a Raw Deal.” Factor Daily. https://factordaily.com/ola-contract-driver-analysis/. Accessed on 15 June 2018.
Kumar, H.L. 2017b. “Principal Employer is not responsible for Contractors Workers PF dues.” Business Manager. https://www.businessmanager.in/principal-employer-is-not-responsible-for-contractors-workers-pf-dues.php. Accessed on 8 May 2018.
Mandhani, Apoorva. 2017. “Petition Filed in Delhi HC to Examine Whether Ola & Uber Drivers are their Employees, Notice Issued [Read Petition].” Live Law.in. https://www.livelaw.in/petition-filed-delhi-hc-examine-whether-ola-uber-drivers-employees-notice-issued/. Accessed on 8 May 2018.
Maselli, Ilaria, Karolien Lenaerts, and Miroslav Beblavy. 2016. “Five Things We Need to Know About the On-Demand Economy.” Centre for European Policy Studies (CEPS) Essay, No. 21/8. https://ssrn.com/abstract=2715450. Accessed on 2 May 2018.
Mitchell, Max. 2018. “Uber Limo Drivers Are Contractors, Not Employees, Federal Judge Rules.” The Legal Intelligencer, April 13. https://www.law.com/thelegalintelligencer/2018/04/13/uber-limo-drivers-are-contractors-notemployees-federal-judge-rules. Accessed on 2 May 2018.
Mulvaney, Erin. 2018. “ Calif-Supremes Embrace Worker Friendly Classification Test.” https://www.law.com/therecorder/2018/04/30/calif-supremes-embrace-worker-friendly-classificationtest. Accessed on 2 May 2018.
Ramaswamy, K.V., and Tushar Agrawal. 2013. “Services-led Growth, Employment, Skill and Job Quality: A Study of Manufacturing and Service Sectors in Urban India.” In India Development Report 2012–13, Mahendra Dev (ed.), 116–131. New Delhi: Oxford University Press.
Ramaswamy, K.V. 2015. “Employment Protection Legislation and Threshold Effects.” In Labour, Employment and Economic Growth in India, K.V. Ramaswamy (ed.), 239–264. New Delhi: Cambridge University Press.
Seth, D. Harris, and Alan Krueger. 2015. “A Proposal for Modernizing Labour Laws for Twenty-First-Century Work: The “Independent Worker.” The Hamilton Project, Discussion Paper 2015–10. http://www.hamiltonproject.org/assets/files/modernizing_labour_laws_for_twenty_first_century_work_krueger_harris.pdf. Accessed on 24 April 2018.
Smith, Rebecca, and Sarah Leberstein. 2015. “ Rights on Demand: Ensuring Workplace Standards and Worker Security in the On-Demand Economy.” http://www.nelp.org/content/uploads/Rights-On-Demand-Report.pdf. Accessed on 25 April 2018.
Sprague, Robert. 2015. “Worker (Mis) Classification in the Sharing Economy: Trying to Fit Square Pegs in Round Holes.” A.B.A. Journal of Labour & Employment Law 31(1): 53–76.
Singh, Jaivir. 2015. “Who is a Worker? Searching the Theory of the Firm for Answers.” In Labour, Employment and Economic Growth in India, K.V. Ramaswamy (ed.), 265–291. New Delhi: Cambridge University Press.
Shyam Sundar, K.R. 2011. “Non-regular Workers in India: Social Dialogue and Organizational and Bargaining Strategies and Practices.” DIALOGUE Working Paper No. 30. Geneva: International Labour Organization.
US General Accountability Office (USGAO). 2015. “Contingent Workforce: Size, Characteristics, Earnings, and Benefits.” GAO-15-168R, 20 April. https://www.gao.gov/products/GAO-15-168R. Accessed on 24 April 2018.
US Internal Revenue Service (USIRS). 2018. Employer’s Supplemental Tax Guide. https://www.irs.gov/pub/irs-pdf/p15a.pdf. Accessed on 30 April 2018.
Weil, David. 2014. “ The Fissured Workplace: Why Work Became So Bad for So many and What Can Be Done to Improve It.” Cambridge, Massachusetts, and London, England: Harvard University Press.
Wood, Robert W. 2015. “FedEx Settles Independent Contractor Mislabeling Case for $228 Million.” Forbes, June 15. https://www.forbes.com/sites/robertwood/2015/06/16/fedex-settles-driver-mislabeling-case-for-228-million/#793e4f51c22e. Accessed on 20 April 2018.
- Non-standard Employment, Labour Laws and Social Security: Learning from the US Gig Economy Debate
K. V. Ramaswamy
- Springer Singapore
- Chapter 11
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