The Federal Trade Commission has adopted a series of policies meant to help part-time workers and contractors for “gig companies” get better wages and penalize companies for mistreatment.
The FTC announced on Thursday that it was adopting a new policy statement outlining issues facing employees within the gig economy, such as Uber drivers and deliverers. The new policies also laid out the FTC’s planned efforts to protect the employees better from being abused by their employers.
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“No matter how gig companies choose to classify them, gig workers are consumers entitled to protection under the laws we enforce,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a press statement. “We are fully committed to coordinating our consumer protection and competition enforcement efforts within the FTC as well as working with other agencies across the government to ensure gig workers are treated fairly.”
The new policies target misrepresenting the nature of gig work to prospective workers, not providing sufficient bargaining power, and concentrating market power in an anti-competitive approach that harms workers’ wages, job quality, and other aspects of the job.
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In light of these problems facing workers, the FTC said that it will strive to hold gig-economy employers accountable for how they represent workers’ expected earnings and their anticipated costs. The agency also said that it would attempt to combat unlawful constraints placed on workers and police unfair methods of competition that harm the workers more than the companies involved.
The decision arrives as more people embrace work in the gig economy. Sixteen percent report earning money through an online gig platform, according to a 2021 report from Pew Research Center. The gig economy market is also expected to generate $455 billion in 2023, according to a study funded by Mastercard.
The FTC’s board voted 3-2 in favor, with the two Republican commissioners voting against the new policy.
One industry advocate slammed the vote. “The thrust of the FTC’s policy statement is that gig work is inherently unfair, but millions of Americans choose gig work because of its flexibility and how it’s helping them make ends meet in the face of inflation,” said Chamber of Progress CEO Adam Kovacevich in a press statement. “While going after tech might score political points, the FTC risks harming millions of gig workers by flirting with employment law proposals that even the Department of Labor hasn’t touched.”
