From Amazon to Uber: Defining Employment in the Modern Economy
56 Pages Posted: 13 Apr 2016 Last revised: 13 Dec 2016
Date Written: 2016
American companies increasingly hire workers without offering them formal employment. Because nearly all workplace protections apply only to “employers” and “employees,” businesses avoid these labels by delegating their employment responsibilities to workers and intermediaries. For example, Amazon hires third-party contractors to staff its distribution centers, FedEx Ground denies the employment status of its drivers, and Uber invites only independent contractors to join its platform. These nonemployee designations make it difficult, if not impossible, for workers to enforce such basic rights as overtime and antidiscrimination protections.
Assessing the growing asymmetry between workers and firms, this Article critically evaluates what it means to employ workers today. Many companies disclaim their status as employers by claiming that they do not exercise daily, direct control over workers. But such a binary approach to control unnecessarily constrains the meaning of employment. In fact, employment status has never depended on whether firms control the minutia of the workplace. Rather, businesses today become employers when they meaningfully influence working conditions, even if layers of contractual relationships obscure that power.
Proposing a model for delineating the reach of employment law, this Article calls upon courts to assess three specific aspects of workplace control: the subjects of control, the direction of control, and the obligations of control. From peer-to-peer platforms that hire independent contractors to more traditional businesses that retain workers through intermediaries, companies that deny their status as employers may still effectively control the manner and means of work. Whether it is Amazon setting its contractors’ pay scale, FedEx specifying the color of its drivers’ socks, or Uber telling its drivers to play soft jazz on the radio, firms that control contractual outcomes frequently control working conditions as well. By analyzing these diverse permutations of control, this Article provides a framework for defining employer-employee relationships in contemporary workplace settings.
Keywords: on-demand economy, ridesharing, sharing economy, gig economy, peer economy, service platform, Lyft, TaskRabbit, Instacart, misclassification, independent contractor, subcontractor
JEL Classification: K12, K20, K31, K42
Suggested Citation: Suggested Citation