The Tax Cuts and Jobs Act of 2017 and the Gig Economy: Why the Employee vs. Contractor Debate Matters More than Ever

The issue of whether workers are independent contractors or employees has become even more relevant with recently enacted and proposed legislation and court cases in many jurisdictions seeking to impose employee status on many Gig economy workforce participants, such as ride-share drivers. This article emphasizes that the U.S. income tax rules, especially after tax reform effective in 2018, makes employee status extremely tax-inefficient for these workers. This article explains the relevant tax law changes and provides various examples of typical settings to confirm that workers with even small relative work expenses are often better off as contractors from a tax point of view.

Economic Security & the Regulation of Gig Work in California: From AB5 to Proposition 22

Employment is the primary legal and political means to address economic inequality in the United States. With the evisceration of the welfare state, employment is also key to democratic outcomes. Despite this, self-employed work deployed by labour platforms like Uber has grown in recent years. What can we learn from worker demands and recent regulatory attempts to clarify and extend who is covered by employment protections? Based on a decade of legal and ethnographic research in the state of California, I situate the legal and regulatory history of labour platform work in the context of platform workers’ experiences and responses to the insecurities and poverty promulgated by their putative status as independent contractors. In highlighting this history, I argue that self-organised labour platform workers were critical to the passage of a state law (AB5) that would have forced companies to treat them as employees—with access to predictable living wages, unemployment insurance, workers’ compensation, and health insurance, among other safety net protections. Finally, I show how, leveraging tremendous structural and instrumental power, the major labour platform companies, in the middle of the global Coronavirus pandemic, sponsored a successful referendum on AB5, and lay out the anti-democratic implications of the referendum's passage.

On the Job, Off the Books: Organizing Against Worker Misclassification in the Neoliberal Era

Worker misclassification is a form of precarious employment in which employers illegally designate their employees as ‘independent contractors’ to cut labor costs. Non-standard employment arrangements and the emergence of the misclassification problem are expressions of neoliberal economic reform and attendant shifts in managerial strategy. Although scholars and government statisticians have documented the prevalence of worker misclassification, extant research on labor-organizing campaigns in response to this practice is lacking. This paper presents case studies of two successful organizing campaigns against worker misclassification: (1) a United Brotherhood of Carpenters and Joiners of America (UBCJA) effort in the Northeastern construction industry and (2) a Teamsters campaign focused on the West Coast port trucking industry. Both campaigns employ similar frames highlighting competition, free markets, and the necessity of industrial change to achieve these ideals. We conclude with a discussion of the prospects and limitations of these organizing strategies given the countervailing political and economic headwinds posed by neoliberal restructuring.

AB 5 and AB 2257 Impacts on Small California Public Agencies

With the recent changes, government agencies are struggling to define worker status under the new laws (DeBlanc and Safarloo, 2020). The interest in eliminating independent contractors is tied to concerns about workers in the private sector, specifically the gig economy, being denied appropriate pay and benefits, yet even government agencies are affected by AB 5 changes (Andoyan, 2017, Bergman, 2020). Traditionally, small public agencies use contractors frequently for professional services, specialists, backfill positions, recreation, geographic information systems (GIS), and much more. This research analyzes the following question: What is the impact of Assembly Bill 5 (AB 5) and Assembly Bill 2257 (AB 2257) on small public agencies in California?

Personal Care Aides as Household Employees and Independent Contractors: Estimating the Size and Job Characteristics of the Workforce

Background and Objectives Although studies pointed out that the number of personal care aides (PCAs) at risk of being in informal employment arrangements is sizeable, little is known about its size and worker characteristics. This study aimed to estimate the share of PCAs working as household employees or independent contractors. It also aimed to compare their basic job characteristics against the job characteristics of those working as agency and government employees. Research Design and Methods Using data from the 2014-2018 American Community Surveys, a sample of 43,287 PCAs working for pay in the Home and Community-Based Service industry was identified, and their job characteristics - full-time weekly work (i.e., working at least 35 hours per week), year-round work (i.e., working at least 50 weeks a year), and annual gross earning – were analyzed by their employment arrangement. Results Analyses found that (1) close to a quarter of aides in the Home and Community-Based Service industry work as household employees or independent contractors while their share in the workforce varies by state and that (2) the work hours and earnings of full-time year-round working household employees or independent contractors are greater than those of their agency counterparts. The results shed light on why some aides may work as household employees or independent contractors. Discussion and Implications The presence of household employees and independent contractors has important implications for PCAs’ job characteristics and labor shortage in the U.S. home care industry. Considering the potentially negative consequences for both the aides’ economic security and the quality of care that consumers can receive, attention should be paid to ways to bring the aides into a more formal employment arrangement.

Should Uber drivers be considered employees for South African income tax purposes?

Orientation: Uber is a leader in the gig economy both internationally and in South Africa. One of the key elements of Uber’s business model is that drivers operate as independent contractors rather than employees. Whilst this may reduce costs, it may also negatively affect tax collection.Research purpose: This study considers whether Uber drivers should be classified as employees or independent contractors in South Africa for employees’ tax purposes.Motivation for the study: As the gig economy expands, uncertainty exists as to how traditional approaches to taxation apply and the extent to which they remain appropriate to new business models that have non-traditional relationships with their participants. This is evident by the extent of disputes arising internationally, and particularly in the United States of America (USA), where Uber was founded.Research approach/design and method: This study engages in comparative legal research to determine the extent to which attempts to resolve this question in the USA may inform the South African context.Main findings: The lack of consistent classification outcomes in the USA suggests that it may be difficult to reach a conclusive classification of Uber drivers in South Africa for employees’ tax purposes using the current tests. Whilst these tests may be adapted, this study supports calls for rethinking the link between tax collection and traditional employment relationships.Contribution/value-add: This study contributes to the development and interpretation of South African tax legislation in the context of new technologies and business models, and provides recommendations for rethinking the approach to tax collection in these contexts.

Local authority liability for flooding: Where should loss fall?

<p>Flooding is New Zealand’s most frequent natural hazard the cost of which is outdone only by the recent Canterbury earthquakes. Local authorities are the bodies primarily tasked with protecting communities against flooding through a range of measures including physical works such as stopbanks. This essay explores the extent to which a local authority can be liable in tort where those physical works fail, causing damage. Direct liability and non-delegable duties are discussed, the latter addressing whether a local authority can nevertheless be liable having outsourced the construction of flood works to independent contractors. Additionally, whether local authorities should be liable for such damage or whether individual property owners ought to protect their own interests through insurance is discussed.This essay recommends that property owners should purchase private insurance, but that local authorities should remain liable at least for their own negligence.</p>

Local authority liability for flooding: Where should loss fall?

<p>Flooding is New Zealand’s most frequent natural hazard the cost of which is outdone only by the recent Canterbury earthquakes. Local authorities are the bodies primarily tasked with protecting communities against flooding through a range of measures including physical works such as stopbanks. This essay explores the extent to which a local authority can be liable in tort where those physical works fail, causing damage. Direct liability and non-delegable duties are discussed, the latter addressing whether a local authority can nevertheless be liable having outsourced the construction of flood works to independent contractors. Additionally, whether local authorities should be liable for such damage or whether individual property owners ought to protect their own interests through insurance is discussed.This essay recommends that property owners should purchase private insurance, but that local authorities should remain liable at least for their own negligence.</p>