When employment discrimination laws were passed in the 1960s, workers typically were considered employees.
Today, there are at least 10 million independent contractors in America who do not have the status of “employee” and therefore have little, if any, protection from employment discrimination and wage theft.
U.S. Rep. Eleanor Holmes Norton, D-D.C., has introduced a bill in the U.S Congress that would amend five U.S. employment discrimination laws “to require that individuals who perform work for employers as independent contractors be treated as employees.” H.R. 4235 is called the Protecting Independent Contractors from Discrimination Act of 2019.
Additionally, the bill would amend the Fair Labor Standards Act of 1938 to require employers pay independent contractors the minimum wage and "time-and-a-half" overtime pay when people work over forty hours a week
If passed, the bill would allow independent contractors to sue employers for discrimination based on race, sex, religion, color, national origin, age, disability and genetic heredity as well as wage theft.
Norton’s bill has no cosponsors and is unlikely to gain much traction. However, it appears to be the first to acknowledge the American workplace has evolved faster than federal civil rights laws, leaving many American workers who once would have been protected from employment discrimination out in the cold.
Norton said Wednesday she proposed the bill because, as the former chair of the U.S. Equal Employment Opportunity Commission, she was concerned about reports in which Uber employees complained they lack protection because they are technically hired as contractors. “I thought about the thousands of federal contractors as well and wanted to make sure contract workers have the same protections against discrimination as employees.” she said.
Independent contractors traditionally were considered self-employed or freelance workers but that definition was strained in recent years by the advent of app-based workers who provide transportation, short-term rentals and repair services.
In January, the National Labor Relations Board (NLRB) changed the test for classifying an independent contractor to include a broad range of factors, such as what type of relationship the parties believe they are creating and the degree of control the company exercises over the worker’s work. Previously, the NLRB focused on the “economic realities of the relationships” and whether the worker was economically dependent upon the business.
In April, the NLRB ruled that drivers for Uber, the ride hailing company, are independent contractors who are not entitled to the protection of federal labor laws. The NLRB said Uber drivers are not like employees because they have “significant entrepreneurial opportunity by virtue of their near complete control of their cars and work schedules.” Uber says it has about 22,000 employees and 3.9 million registered drivers.
The NLRB’s ruling is contrary to developments in several states, including California and New York.
New York passed the first minimum pay rate for Uber and Lyft drivers in 2018 after economists at the New School and the University of California Berkeley published a report showing that more than half of Uber drivers work full-time and about half support families with children. The report found their earnings were so low that 40 percent qualified for Medicaid and about 18 percent qualified for food stamps.
California Gov. Gavin Newsom recently signed a bill into law requiring Uber and other app-based companies to pay workers in that state a minimum wage and to provide benefits like health insurance and sick leave This follows a 2018 ruling by the California Supreme Court that orders employers to presume workers are employees, instead of independent contractors.
How many independent contractors are there in America?
The U.S. Bureau of Labor Statistics reported in 2018 that 6.9 percent or 10.6 million workers in America are independent contractors.
Researchers Lawrence Katz of Harvard University and the late Alan B. Krueger of Princeton University issued a report in 2018 that estimated 9.6 percent of American workers were independent contractors in 2015, which is a total of 15 million workers. They said workers who provide services through online intermediaries, such as Uber or Task Rabbit, accounted for 0.5 percent of all workers in 2015.
Finally, Paychex, Inc. a Rochester, N.Y., company that provides payroll services, released a study in January stating the growth rate of independent contractors “far outpaces” the growth rate for employee hiring among small businesses. Paychex says the growth rate for hiring independent contractors peaked in August 2017 at 11 percent and was five percent in 2018.
Norton’s bill would extend the protection of the follow laws to independent contractors:
Currently, these laws apply only to employees (and job applicants) who work for employers with a minimum number of workers (i.e., 15 workers for Title VII and the ADA and 20 for the ADEA).
The bill was referred to the House Education and Labor Committee.