Friday, April 20, 2018
I have been reading some very good pieces of late on Gig deregulatory laws authored by Judge David Langham, here, Brandeis Dean David Weil, here, and, and author and policy analyst Peter Rousmaniere, here. I think a sustained critique of these laws is emerging. (I will say in passing that I partially disagree with Peter’s thesis that people Gig because they like it; I think they convince themselves they like the "freedom" of gigging because no real work is available).
It is possible that state Gig bill drafters are hearing the dialogue. How else to explain the very curious Colorado iteration of a Gig bill? (for purposes of this discussion I refer exclusively to Senate Bill 18-171, here). I will say at the outset that as of the time I am writing this is merely a bill and has not yet been enacted as law. But what a curious bill. To start off with, the bill replaces the ten-factor Restatement Second Section 220 of Agency test with a ten-factor independent contractor test of its own (I will omit some of the threshold Handy, Inc.-drafted definitions, which I have explained at length elsewhere on this blog). A Gig “worker” does not perform “employment,” under 8-70-140.9 of the proposed Senate bill, if:
(a) The services performed by the contractor are governed by a written contract executed between the contractor and a marketplace platform that states that the marketplace contractor is providing services as an independent contractor and not as an employee;
(b) All or substantially all of the payment made to the marketplace contractor is based on the performance of services or other output;
(c) The marketplace contractor is allowed to work any hours or schedules the contractor chooses; except that, if the contractor elects to work specified hours or schedules, the contract may require the contractor to perform work during the selected hours or schedules;
(d) The marketplace contractor is able to perform services for other parties;
(e) The marketplace platform does not provide on-site supervision during the performance of services by the marketplace contractor;
(f) The marketplace platform does not require the marketplace contractor to obtain training;
(g) The marketplace contractor bears all or substantially all expenses that the contractor incurs in performing the services;
(h) The marketplace platform does not require the marketplace contractor to use specific materials, supplies, or equipment in performing services, other than the marketplace platform's online-enabled application, software, website, or system;
(i) The marketplace contractor does not perform service requests at or from a physical business location that is operated by the marketplace platform; and
(j) The written contract between the marketplace platform and the marketplace contractor states, in a conspicuous manner, that the marketplace contractor is not entitled to unemployment benefits under articles to of this title, and that the marketplace contractor is responsible for paying applicable taxes on income the contractor earns pursuant to the contract relationship.
I do not have much to say about these factors other than to ask the reader to consider how much a contested hearing over employee-status would begin to resemble a traditional employee-status hearing under this test. Just looking over the list casually I can quickly imagine fact disputes on almost every factor.
But that is not what I find most interesting about the bill. Consider the following language at 8-40-301(10)(b) of the bill:
(b) (I) Notwithstanding any other provision of this subsection (10), an individual marketplace contractor that performs services for pay for a marketplace platform shall be deemed to be an employee, regardless of whether the common-law relationship of master and servant exists, unless:
(A) The individual is free from control and direction in the performance of the service, both under the terms of the contract for performance of service and in fact; and
(B) The individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed.
(II) For purposes of this subsection (10)(b), the degree of control exercised by the marketplace platform for whom the service is performed over the performance of the service or over the individual performing the service must not be considered if the control is exercised pursuant to the requirements of any state or federal statute, rule, or regulation.
(C) Compliance by the parties with the conditions specified in subsection (10)(a) of this section creates a rebuttable presumption of an independent contractor relationship between the marketplace platform and the marketplace contractor that may be overcome only by clear and convincing evidence.
This is very odd language. First, in b(I), there is some suggestion that an individual, if not determined to be a “market contractor,” could be deemed an employee even if not a common law servant. Perhaps that is current Colorado law, but it is, in any event, expansive. I wonder if that is what the drafter intended.
Second, (b)(I)(A) states that notwithstanding any other provision of the Gig bill, the “contractor” will be deemed an employee unless: the individual is free from control and direction in the performance of the service, both under the terms of the contract for performance of service and in fact. Does that not simply return us to the control test? Perhaps the drafter seeks to avoid that outcome, in (b)(II), by writing “the degree of control exercised by the [putative employer] . . . must not be considered if the control is exercised pursuant to the requirements of any state or federal statute, rule, or regulation.” Translation: if the Gig employer is compelled to exercise control by law, it is not “real” control. While I do not know what the courts will make of that language, I am confident that it does not work to undo (b)(I)(A).
Finally, (b)(I)(B) suggests that “notwithstanding” the Gig law, the individual is an employee unless engaged in an independent trade, occupation, profession, or business related to the service performed. Frankly, that seems to hyper-prioritize on of the Restatement 220 factors. Section 220(2)(b) provides, as only one factor for the fact-finder to consider, “whether or not the one employed is engaged in a distinct occupation or business.” Thus, if working for a "marketplace platform," without having a separate business related to the task at hand, one "shall be" deemed an employee (?!)
In short, this is a curious, odd bill. Fortunately, some of my former Wyoming law students are practicing workers’ compensation attorneys in Colorado. I am confident they can help straighten this out should it come into law. What the prior Gig bills, upon which I have previously commented, lacked in morality they made up for in clarity. This bill seems an attempt to pay lip service to a bad idea. It is a partial retreat, whether intentional or unintentional.
Michael C. Duff