We live in a “gig” economy. Something that lots of us in the construction industry have known for decades as “independent contractors” or “day labor.” With the impact of millennials in the new economy, “gig” workers are becoming a major factor. That may change after a 7-0 decision in the Supreme Court of California. Let me lay the groundwork for the decision.
According to a recent article written by Larry Alton, a U30 (under 30) contributor for Forbes:
The "gig economy" isn’t just a buzzword. It’s an accurate description of the state of the modern market; though the Bureau of Labor Statistics has admitted difficulty in counting the exact number of independent contractors and contingent workers, Intuit estimates that "gig" workers represent 34 percent of the workforce, and will grow to be 43 percent by 2020.
In case you aren’t familiar, the gig economy is a term that refers to the increased tendency for businesses to hire independent contractors and short-term workers, and the increased availability of workers for these short-term arrangements.
The article goes on to illustrate the good, bad and even some ugly of the “gig economy” for the millennial generation.
Alton refers to Uber and Lyft drivers as members of the “gig economy”, but that may be changing as this post is being written.
The Supreme Court of California handed down a unanimous 7-0 decision that could force employers like Lyft and Uber to change the way they deal with their drivers. An article written for the San Francisco Chronicle by Bob Egelko on April 30, captioned “Gig workers could gain employee status with California Supreme Court ruling” may be a turning point for the way that employers in the “gig” world have to treat their workers.
According to the lead of the article,
Companies that want to classify their workers as contractors and avoid paying them wages and benefits that state law requires for employees must prove the workers are running their own businesses, the California Supreme Court ruled Monday in a case that could help thousands of drivers for ride-hailing companies like Uber and Lyft, as well as other gig economy workers.
Ruling unanimously in a suit by drivers of a package and document delivery company called Dynamex Operations West, the court said California’s wage laws must be interpreted to protect both workers and competition among ethical businesses.
Why should you care if you are in the construction business in Texas or even the rest of the country? Well, if you are already treating your workers as employees, then this law, if not overturned, will lay the groundwork for a "levelling of the playing field” in the industry by requiring that all companies treat their workers as employees, not independent contractors.
Already, organizations like the Construction Career Collaborative or C3 are working to improve the industry, and this change in the California law might improve the future for the skilled craft workers in the Houston area.
The Supreme Court case is: Dynamex Operations West vs. Superior Court, S222732.