Digital platform companies like Uber, Lyft, Instacart, DoorDash, and others are waging increasingly aggressive campaigns across the country to erode longstanding labor rights and consumer protections, according to a new Economic Policy Institute report. As a result, states have adopted scores of new laws in the past decade to block local labor standards, deny workers legal status as employees, and weaken legal tests designed to prevent misclassification of workers as “independent contractors.”
The report finds that:
- 44 states have adopted laws intended to block local governments from regulating ride-hail services or setting standards for driver pay and working conditions.
- 34 states have passed laws defining ride-hail drivers as non-employees and/or explicitly carving drivers out of coverage under state minimum wage, unemployment, workers’ compensation, workplace safety, paid leave, and non-discrimination protections.
- 10 states have adopted “marketplace platform” laws designed to exclude all current and future app-based workers from coverage under state minimum wage, unemployment, and workers’ compensation laws.
Because Black, brown, and immigrant workers are disproportionately represented in platform-based work, company campaigns to strip legal protections from drivers and delivery service workers help maintain deep racial inequalities and occupational segregation in U.S. labor markets. Just as New Deal-era occupational carve-outs that excluded agricultural and domestic workers from major federal labor laws were racist policies designed to maintain economic white supremacy, proposals to create new legal categories that limit platform workers’ rights have clear racial impacts.
“State laws blocking labor protections for Uber or Lyft drivers have spread across the country, and now tech companies are backing state laws that target app-based workers in a growing list of other occupations—everything from cleaning services to health care to construction. This state-by-state erosion of worker protections threatens fundamental rights of all workers and contributes directly to maintaining deep racial inequalities in U.S. labor markets,” said Jennifer Sherer, senior state policy coordinator for EPI’s Economic Analysis and Research Network (EARN) Worker Power Project.
Strong legal tests to distinguish employee and independent contractor status, such as an ABC test, are key to combatting worker misclassification. The report finds that:
- 18 states and the District of Columbia have adopted the ABC test for unemployment eligibility and/or wage and hour protections. The ABC test presumes that a worker is an employee and puts the onus on the employer to prove a worker is truly an independent contractor.
- 7 states have repealed or weakened formerly strong ABC tests in the past decade.
- Some states have taken steps to strengthen enforcement of ABC tests and increase penalties for employer violations in order to prevent misclassification of workers as independent contractors.
- All states have room to adopt or further strengthen enforcement of ABC tests to better prevent employers from misclassifying workers in order to deny them minimum wage and other employment protections.
“Over the last decade, platform companies have targeted state legislatures, courts, and ballot initiatives to serve their interests in evading legal obligations to workers and consumers,” said Margaret Poydock, EPI policy analyst and government affairs specialist. “States must defend against tech company threats and protect workers’ rights, not strip them away. The good news is that drivers and delivery service workers are organizing in many cities across the country and developing a proactive policy agenda that can empower workers and protect flexible work without exploitation.”