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Golden Gate University Law Review

Abstract

The gig economy is a collection of markets that connects consumers with on-demand service providers (“gig workers”), and it has revolutionized the way in which consumers seek and receive services, such as transportation and household tasks. The ease of calling an Uber or Lyft, as opposed to hailing a cab, led to a decrease in arrests for driving under the influence in major cities. Similarly, it transformed the way in which many workers seek and perform work, as many gig workers enjoy flexibility and control over their work schedule. Gig workers can work for multiple platforms and also have authority over how much they work. Some have hailed that Uber and, more broadly, gig-economy work, represents the future of work, but this is a troubling proposition. Gig-economy work is largely founded on a model that relies on classifying most of its workforce as independent contractors who, as opposed to employees, do not receive benefits such as overtime or sick pay and are not covered by minimum-wage laws or workers’ compensation benefits.

The increasing prevalence of employers classifying their workers as independent contractors spurred a debate about when it is appropriate to employ independent contractors, as opposed to employees. In April 2018, the California Supreme Court issued a landmark decision in Dynamex Operations West v. Superior Court. Dynamex provided a new test for determining whether a worker should be classified an employee or an independent contractor. The new test provides increased protections against the misclassification of workers as independent contractors by creating a presumption of employee status. In September 2019, the California Legislature codified the Dynamex test and clarified its application by approving Assembly Bill 5 (“AB 5”).

This Comment posits that the Dynamex decision created a dysfunctional dichotomy by bringing many misclassified workers into the purview of the Industrial Welfare Commission’s (“IWC”) Wage Orders, while excluding the same workers from other protections and benefits that employees are entitled to under the Labor Code. By codifying the “ABC” Test into the Labor Code, AB 5 corrected some of the inconsistency that Dynamex created. Nevertheless, while Dynamex and AB 5 provide a critical framework for combating misclassification and the resulting worker exploitation, this Comment argues that they fall short of bringing misclassified independent contractors into the purview of the most important employee right: collective bargaining.

Accordingly, this Comment proposes a framework that would afford misclassified independent contractors the right to collectively bargain with the party employing them. This Comment explores the potential for a statewide labor relations scheme specifically for independent contractors, as well as the guild model as pathways for collective bargaining. Part I defines the problem of independent contractor misclassification and provides an overview of the Dynamex decision, relevant background, and subsequent decisions interpreting Dynamex. Part II highlights the shortcomings of Dynamex in adequately addressing the independent contractor problem. Part III discusses Assembly Bill 5 as a promising solution to combating misclassification. Finally, Part IV provides recommendations for a path to collective bargaining for workers misclassified as independent contractors.

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