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Congress Is Struggling To Handle The Gig Economy

Yet one more area of controversy for our Congress to battle over is the "Gig Economy." Should Congress regulate it through new legislation? - or is it better to leave it to the courts?

On September 6, 2017, the House Education and Workforce Committee held a fascinating Congressional Hearing to air and discuss competing viewpoints over the likely need for unique federal labor and tax legislation to deal with the Gig Economy (also called the "on demand economy").

TESTIMONY FOR AND AGAINST THE GIG ECONOMY: Testifying at the September 6, 2017 Congressional Hearing was Michael Beckerman, President and CEO of the Internet Association. Mr. Beckerman testified (in support of the Gig Economy) that he is worried that policymakers and regulators may put up roadblocks (to the Gig Economy) to consumer choice and competition.

Sharon Block, a former Labor Department official and current Executive Director of Harvard University Labor and Worklife Program, testified at the same Congressional Hearing (but with less sympathy for the employer needs of the Gig Economy) and stated "We have a danger here of placing (and favoring) the online platform economy (her words for the Gig Economy) in one category and saying that labor and employment laws don't fit."

Rep. Virginia Foxx (R-N.C.) said at the September 6th Congressional Hearing: "The self-employed individuals who rely on the sharing economy (yet another term for Gig Economy) for work don't fit neatly into obsolete job categories defined in another era. So, there are important questions over how we can modernize policies to meet the needs of the future."

MANY NEW STATE INDEPENDENT CONTRACTOR LAWS, BUT NO LAWS PASSED BY CONGRESS: While members of Congress have introduced 15 proposed laws (all different formulations!) dealing with independent contractor classification and misclassification of worker status since mid-2007, no actual laws have been passed by a very divided Congress. This legislative area regarding the Gig Economy is a "political football"! In the meantime, new state independent contractor laws of all types have been passed in over half the states in that time. Any new federal laws about independent contractor status in the Gig Economy would not change the amazing variety of state laws that currently exists in the independent contractor area.

Legislators sharply disagree about whether Congress should focus its legislative efforts on regulating the Gig Economy at the present time.

Legislators also very much disagree about whether Congress should step in and develop a new revolutionary system to provide "employee type benefits" for the independent contractors in the Gig Economy which are largely missing now in the Gig Economy.

Many legislators struggle to decide if Congress should make an attempt to revise the independent contractor legal test to account for the changes in modern society brought about by the Gig Economy.

Due to the incredible explosive growth of the Gig Economy with its millions of independent contractors, Congress is being forced to evaluate what legislation is appropriate. We will be seeing more and more articles about this complex issue.

Questions? Contact Attorney Nancy Joerg in our St. Charles office at (630) 377-1554 or email her at [email protected].

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