Apployment

Abstract

The fissuring of business enterprises—which involves the shifting of work from lead firms to smaller, less accountable entities or independent contractors—harms workers by increasing violations of basic labor standards, lowering wages, and limiting access to benefits tied to traditional employment. The vexing nature of this problem for employment law and policy is currently exemplified by the ongoing debates over how to classify gig economy workers, including drivers for Uber and other rideshare companies. In this Article, however, I discuss the daunting challenges of the next generation of fissuring: a firm’s utilization of web applications, algorithms, and other innovations to create a layered enterprise in which it avoids anything approaching employment.

From a labor cost-avoidance perspective, the ideal enterprise structure is one in which the firm profits from the delivery of goods and services without actually employing any of the workers who contribute their labor. As this incentive intersects with emergent technology, I predict the rise of many visible, high-value firms that—unlike the commonly discussed Uber and rideshare companies—will operate well removed from employer-like control over their core activities. I call this business model “apployment.”

While some such enterprises already have emerged in the sharing economy, I contend that apployment will spread. Using illustrative examples from different sectors, including construction, apparel, and even legal education, I demonstrate how many types of firms will be able to achieve apployment, eluding employment of the workers who produce and distribute their goods and services. I conclude that current law is ill-equipped to respond to the proliferation of such apployment structures and provide a framework for rethinking how to protect worker welfare.

Keywords: employment, joint employment, fissuring, disaggregation, outsourcing, independent contractor, labor contractor, ABC test, labor, labor law, gig, platform economy, work law, self regulation, ride-share,

JEL Classification: K00, K31