Gig workers earn income by providing on-demand work. Gig work is not limited to ride-hailing or food delivery and can include a variety of work in a variety of industries. Many companies classify gig workers as independent contractors, resulting in fewer protections for these workers as compared to traditional employees. For example, anti-discrimination and anti-retaliation laws that apply to employees do not apply to independent contractors. Gig workers classified as independent contractors are not entitled to workers’ compensation protections or unemployment benefits, and they must pay higher employment taxes on their income. (Find out if you may have been misclassified and what to do about it here.)
The Federal Trade Commission (FTC) is trying to level the playing field and give some protections to gig workers. In September 2022, the FTC released a policy statement clarifying its authority and intent to protect gig worker rights and identifying several ways it will use existing federal laws in a new way to protect gig workers from unfair, deceptive treatment and anti-competitive trade practices.
Here are five ways the FTC wants to help gig workers:
- The FTC will hold companies accountable for false, misleading, or unsubstantiated claims about wages and earnings. For example, some companies may guarantee a certain amount of pay per time period or per job, but do not clearly advertise how pay is determined. This can leave gig workers uninformed about how their pay is actually calculated. The FTC seeks to hold companies that make such misleading or unsupported claims about pay to potential gig workers accountable for unfair or misleading practices. It will also deter companies from withholding pay without workers’ consent—for example, by modifying tip-sharing practices without notifying workers ahead of time.
- The FTC will enforce laws that prevent companies from hiding start-up costs, training fees, and other expenses. It will require companies to be upfront about what gig workers may have to spend to get started working.
- The FTC will require companies that use algorithms and electronic surveillance to monitor gig workers or change their pay, work assignments, or ratings to do so legally. While the FTC doesn’t explain what “legally” means, the statement says that “companies are responsible for fulfilling their promises to their workers.” This could mean that if a company promises that pay will be determined on a certain set of factors influenced by an algorithm, it must not change the algorithm without notifying gig workers.
- The FTC will look for companies that subject gig workers to unfair “take it or leave it” contracts. The FTC will be especially suspicious of contracts that prevent gig workers from taking other jobs during or after their employment, such as non-competition agreements, require gig workers to waive fundamental protections, or prevent gig workers from writing negative reviews. If these types of contracts are too one-sided for the benefit of the company, the FTC may find them to be illegal.
- The FTC will watch for companies that unfairly work together to limit gig workers’ options or income. If two companies stack the deck against workers by agreeing on low wages and benefits, not hiring each other’s former workers (also known as no-poaching agreements), or otherwise working together to keep the cost of labor low, the FTC can investigate. These are often seen as unfair trade practices
What can the FTC do if it finds that a company is acting in unfair, deceptive, or anti-competitive ways?
The FTC can force companies to halt certain illegal practices and change their behavior. In some cases, it can make companies pay money as penalties for violating the law. In extreme cases, where a company has committed a crime, the FTC can refer to the Department of Justice for potential criminal prosecution. However, it’s worth noting that protecting gig workers is a new area for the FTC. It remains to be seen how willing courts will be to uphold the FTC’s enforcement power in this arena.
If you are a gig worker and have questions about your rights, contact experienced employment attorneys like the attorneys at Sass Law Firm. Sass Law Firm has been representing Tampa Bay workers since 1993.