A warning to gig economy providers is issued by the FTC

Since the pandemic, gig work has grown significantly and now makes up a significant fraction of U.S. economic output; the FTC estimates that by 2023, gig work will generate $455 billion in sales. Commissioner Rebecca Kelly Slaughter said in a statement that the commission “makes clear of its determination to protect gig workers from unfair conduct” with its statement.

“Gig workers deserve to be able to compete for their labor, just as consumers deserve to have competitive markets for purchasing goods and services.” she said. “Robust competition for workers’ labor can increase wages, improve benefits, and improve working conditions for all. A key component of this initiative is a thorough examination of business practices and enforcement of laws against violations.”

HR professionals have historically faced difficulty in the gig space due to the regulatory concerns that employers may be held liable for misclassifying workers as independent contractors. According to the U.S. Department of Labor, it will review its regulations on this subject and invite workers and employers to give their input on the topic.

There has been much debate and legislation about gig work at the state and local levels, particularly in California. A ballot measure, Proposition 22, was successfully passed by voters after state lawmakers adopted AB-5, a law reclassifying some employees as independent contractors. A California judge, however, determined that Prop 22 was unconstitutional.

In addition to delivery, AB-5 has a wide-ranging impact on other industries, including trucking. There has been a growing controversy over independent contractor classification, which has caused some gig economy companies to complain that current legal restrictions make it difficult for them to address workers’ concerns about wages and benefits.


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