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Uberization of the Workplace
How the Service Economy is Changing the way HR Must Manage Employer/Employee Relationships
2017 PA SHRM State Conference
Mario R. Bordogna, Esquire
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2017 PA SHRM STATE CONFERENCE
ROADMAP TO UBERIZATION
Exit Light Enter NightGig Stats & StudiesHR/Legal Implications
ClassificationEmployment AgreementsBackground Checks
Looking Ahead/Takeaways
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EXIT LIGHT
ENTER NIGHT
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2017 PA SHRM STATE CONFERENCE
EXIT LIGHT ENTER NIGHT
2 basic worker constructs:
Employer/employeewages, taxes, insurance, safety,discrimination protection, etc.
Independent contractornone of the abovespecific duration; control methodprovide equipment, etc.
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EXIT LIGHT ENTER NIGHT
So which one is a Gig Worker?
These workers typically:Decide when/how often to workChoose whether to work at allWork with many providers (at once?)Don’t set fees/ratesCan be prohibited from serviceGet no benefits
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EXIT LIGHT ENTER NIGHT
Chicken or Egg?
Companies provide technology platformwhich allow workers and consumers tofind each other for performance ofcore service
OR
Companies provide a labor brokeringfunction supplying available/qualifiedworkers to businesses/individuals inneed
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EXIT LIGHT ENTER NIGHT
How Did We Get Here?
Recession and technologyCall center jobsGoogle AlphabetNeed to inflate/shrink workforceLower-tier AND white collar rolesTraditional career paths less commonChanges to social insurance/benefit
compact
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EXIT LIGHT ENTER NIGHT
The Real 50 Shades of Grey
Uncertainty in relationshipsLeads to common/high-stakes litigation
Wage and hourLabor relations headachesJoint employer classifications
HR applicationsEmployment agreementsBackground checks
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GIG STATS & STUDIES
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GIG STATS
Bloomberg Spring 2006 Survey of Nearly 1,000 Gig Economy Workers
69% Millennials (18 – 39)
14% Gen X (40 – 51)
17% Baby Boomers (52+)
Top 3 reasons why they do it:
1) Being own boss
2) Flexible schedules
3) Greater work/life balance
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GIG STATS(8/2016 UPWORK INDEPENDENT WORKFORCE SURVEY
OF 6,000 WORKERS)
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GIG STATS(8/2016 UPWORK INDEPENDENT WORKFORCE SURVEY
OF 6,000 WORKERS)
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UBER/LYFT
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GIG CASE STUDIES – UBER/LYFT
Transportation service companiesFare set by company% Commission takenPersonal cars usedVehicle checks/inspectionsDrivers work when/how long desired
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INSTACART
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GIG CASE STUDIES – INSTACART
Same-day food shopping delivery serviceItems picked, packed & deliveredFees for delivery (+ food)Are you shopping, or delivering?
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HANDY
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GIG CASE STUDIES – HANDY
Fix-It On-Demand servicePlumbers, cleaners, and moreYou select project and timeProfessional supplied by companyCommission taken on service price
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GIG CASE STUDIES: BONUS ROUND
How far does the service economy go?
AirBNB ( Happy Host)Medical services (Heal; Pager)Exotic Dancers (Yeah, I said it)
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HR/LEGAL IMPLICATIONS
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Classification
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Classification
The Independent contractor/employeedichotomy:
Uber Classification LitigationDOL (wage and hour)Joint EmploymentCollective bargaining
All Relationship-Dependent
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Classification
Uber Litigation
Multiple-jurisdiction class actionsStatus; On-Call; Tips; Gas; More?Conflicting resultsRemember Fed-Ex?
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HR/LEGAL IMPLICATIONS
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Labels Avoided Labels Used
Employee SupplierHiring OnboardingWages/Earnings FeesShift Availability
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Classification
DOL (wage and hour)
2015 Administrator Interpretation is nomore:
“Most workers are employees underFLSA”
6 factor, fact-specific test centering oneconomic realities & whether an entity“suffers or permits” a person to work
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Classification
1) Is work integral part of business?2) Managerial skill impact profit/loss?3) Relative investment comparisons4) Special skill/initiative required?5) Permanent/indefinite relationship?6) Nature/degree of employer control
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HR/LEGAL IMPLICATIONS
Classification
Joint Employment
Are you an employee? are you anemployer?How many employers are there?
DOL: 2016 Administrator Interpretation also
no more
NLRB - old (Browning-Ferris Industries/BFIcase)
NLRB - new (Board GC Advice Memorandum:misclassification may violate NLRA)
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HR/LEGAL IMPLICATIONS
Classification
Collective Bargaining
Seattle, Washington Ordinance
New York City – LaGuardia Airport
Local regulation can be a risk tocontractor status
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HR/LEGAL IMPLICATIONS
Employment Agreements
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Employment Agreements
2 biggest factors define nature/scopeof worker relationship:
1) Your employment Agreements2) The real world, as law applies to it
2 is more important than 1, but overlook 1 alone and it can sink you
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Employment Agreements
Devil is in the language details
Characterizing worker relationshipsElements of control
How v. when/where work is done
Engagement of others
Economic dependence
Handling expensesNo benefits
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Employment Agreements
Mandatory Arbitration Clauses
Primary considerations:1) Traditional oversights (Uber case)
Bargaining powerConspicuousnessFairness (fees, etc.)
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Employment Agreements
Mandatory Arbitration Clauses
Primary considerations (con’t):2) Individual or class
NLRB position (D.R. Horton)Circuit CourtsSCOTUSKenny Rogers
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Employment Agreements
Mandatory Arbitration Clauses
Drafting ideas:1) Stand alone2) Coverage and caveats3) Caution on limiting remedies4) Delegation5) Reasonableness
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HR/LEGAL IMPLICATIONS
Background Checks
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Background Checks
Vetting workers provided to another ormade available to public for services
Services done in homes, with children,etc.Do it (viewed as employees) or don’t doit (liability risk)
Can you negligently engage contractors?
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Background Checks
If you do it, how are you doing it?
Record v fingerprint checks (or both)company v government (or both)Local regulation picking up (Ex: Mass)
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2017 PA SHRM STATE CONFERENCE
HR/LEGAL IMPLICATIONS
Background Checks
How do EEOC requirements fit in?:No all-or-nothing policiesIndividualized inquiryJob related restrictions
State/local laws
Ban – The – Box
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LOOKING AHEAD
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2017 PA SHRM STATE CONFERENCE
LOOKING AHEAD
Trends to Watch
Growth of sector:
Value of marketMore providers = more workersMore workers = more doing >1 “gig”
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2017 PA SHRM STATE CONFERENCE
LOOKING AHEAD
Trends to Watch
Legal Activity:
Classification/wage & hour litigationSCOTUS
Local RegulationSeattle/NY (“Freelance Isn’t Free”)
EEOC strategic plan focusBig data impact
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2017 PA SHRM STATE CONFERENCE
LOOKING AHEAD
Trends to Watch
A Third Category:
The “Independent worker”Portable benefits
Uber WC and Congressional pilotsMix of legal protectionsSome benefits to both sides lost byexisting classification dichotomy
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2017 PA SHRM STATE CONFERENCE
LOOKING AHEAD
Takeaways
Gig economy likely here to stayDefine work relationships carefullyScrutinize language in service agreemts
Focus: control and economicsUse arbitration clauses w/class waiverRefresh background check practices
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