Why the Department of Labor Should Support Independent Work

Yesterday, on behalf of America’s app-based rideshare and delivery platforms and the people who rely on them, Flex submitted comments on the Department of Labor’s worker classification proposal.

Our comments boil down to this: the Department of Labor’s proposal is unnecessary. It’s not reflective of the modern economic choices and opportunities enabled by app-based platforms. It’s contrary to what most independent workers want. And it’s potentially harmful to all those who have embraced app-based services to earn income, meet key community needs, and better fit their lives.

At the same time, we note that the Department of Labor today can, under the existing rule’s more modern, workable, and predictable approach, effectively target actual instances of misclassification—thus removing the need for the abrupt about-face turn the proposal represents. Flex’s comments also offer targeted, constructive suggestions for the Department of Labor to at least partially soften the proposal’s rougher edges.

Now, let’s dive into why the Department of Labor shouldn’t move forward.

Workers have more choices than ever in the evolving 21st-century economy. Thanks to technological innovation, more people now have the means to choose where, when, how often—and with which companies—they want to earn income.

The government’s own economic data lend credence to this idea. There are over 10 million jobs open across the U.S., with no shortage of jobs with traditional employers. Just two weeks ago, the former Deputy Secretary of Labor under President Obama noted that government data shows that “[v]ery high levels of workers [are] quitting their jobs --- 4 million ---” which “show[s] that labor markets … continue to give workers a meaningful choice, and therefore power, in the kinds of jobs they will accept.”

Yet, nearly 25 million people choose to earn with app-based platforms. That’s because these workers recognize the freedom and competition-driven choice that comes from app-based platforms. They like the fact that they can’t be fired, can scale their income up and down at will, and can enjoy more flexibility than they’ve had in the past, as Jobs for the Future CEO Maria Flynn recently noted. The current rule better reflects this app-driven worker empowerment.

App-based workers overwhelmingly prefer to remain independent. For roughly a century, U.S. labor laws have been based on a dual classification system; a worker is either an employee or an independent contractor. The common thread was for independent work was control over how, when, where, and for whom to work. Employees, on the other hand, generally have set hours and set tasks dictated and controlled closely by their employer.

However, app-based platforms have transformed the way work can be done, and millions of app-based earners have voted with their feet to choose a new economic path over the traditional system. Instead of making the regulatory landscape more challenging for independent work, the question the Department of Labor should be asking is: Should an employment classification regime crafted nearly a century ago really guide us in the 21st century?

Because if you listen to app-based earners, you’ll hear that they overwhelmingly (77%!) prefer to remain independent contractors, thus preserving the flexibility and freedom to choose when, where, and how often to work. That’s what the first-ever national poll of app-based workers found earlier this year, along with the facts that:

• 8 in 10 spend 20 hours or fewer per week on app-based platforms (with 61% working 10 or fewer hours a week),

• More than 84% are satisfied with app-based platforms; and

• 85% say app-based platforms have been fair to the flexibility of workers' schedules.

The current rule more effectively supports independent work, and the vast majority of people who drive, shop, and deliver goods via app-based platforms agree.

The current rule works, has not hindered DoL’s enforcement abilities, and such a rapid and unsupported policy reversal presents real risk. Flex’s comments detail how the current rule provides a more workable and certainty-enhancing classification analysis rubric, bringing a more modern, practical, and predictable approach to the prior interactions of the multi-factor balancing test. Further, we show that the Department has maintained its ability to bring enforcement actions against actual instances of misclassification under the current rule.

Lastly, we note that the DoL adopted the current rule less than two years ago in the agency’s first-ever notice-and comment-rulemaking process to address worker classification status under the FLSA. To make such an about-face in a short period of time runs the risk of politicizing the Labor Department and making its proposal, if adopted, vulnerable on appeal.

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If the agency does move forward, Flex offers suggested changes that focus primarily on areas where the NPRM ignores the realities of technology-driven 21st century work (Factor #1), strays from decades of relevant case law (Factor #2), would hurt entrepreneurs and small businesses (also Factor #2), is contrary to judicial precedent and the DoL’s own guidance (Factor #4), or represents an abrupt reversal by the agency and thus would likely be found arbitrary and capricious (Factor #5).

We look forward to working with DoL and other policymakers to support independent work. The diverse array of millions of people—from mothers and fathers to veterans, caregivers, and many others—who have embraced app-based work deserve no less.