To clarify, I was basing the "some 30%" on the wage change distribution histogram that comes somewhat further down in the article from the statement you quote.
> Mostly gray area because gig corps don't like actually treating the workers as contractors, they just like the lowered costs.
I don't follow this? Is this predicated on the fact that gig corps can choose not to work with contractors that don't meet their criteria? If so, how is this different from only using lumber yards that consistently meet your expectations?
The implication of the parent poster seems to be that there are legal requirements regarding contractors and legal requirements regarding employees but gig corps would prefer to treat their workers as one or the other class depending on which is to their benefit - which would be against the law because of the aforementioned concept "legal requirements".
Exactly this - there are differences in what you can require from someone on employment contract and external contracting company (whether that company is single person or not) and effectively making one category into another without actually reclassifying (like employing as employee) is considered fraud in most places.
There are possible frauds from both employer and employee side, but I will list some common "landmines" of miss-classification, though beware that they are picked across different jurisdictions and I do not remember which apply where. All examples are possible items that can be decided to be part of misclassification, usually from contractor to effective employee:
- requiring specific dress code is non-enforceable on contractors in many places
- contractor is not required to provide specific person to fulfill the job, only a person of appropriate qualifications (it's valid for there to be a check on those qualifications)
- in UK case, contractor might be asked to prove that they have a substitute to work in their place!
- [Poland, possibly other] having only one client is not illegal, but can be grounds for investigations and if it's your only client where you work for equivalent of full-time job, it will be evidence for tax fraud
- You can not enforce working hours on contractors in most jurisdiction, only specific deliverables (taking part of work meetings is deliverable, requiring availability in general of specific person at specific times can be grounds for reclassification)
- above is often linked with "gig economy" - rules regarding "contractors" needing to pick up available jobs etc. are often considered illegal skirting of employment law.
As sibling comment mentioned, more is available from your local (too) friendly search engine. And employment lawyers and HR specialists.
In this case would it matter if they were contractors or not?
There is a way of calculating the pay for a job. It is predictable. Publish the algorithm. Want to change it? Great. Update the documentation and then publish that. The workers should be able to calculate exactly what they are owed. They can decide to leave or stay.
Only in America are people deflecting by bringing up the employment status of people when the issue is a lack of transparency designed to allow wage theft.
You’re arguing that it’s sometimes legitimate to hide payment information. So I can hire someone for a job, and only I know what the job is worth. The worker just has to try it out and see if their valuation of the job is the same as my valuation?
The fact that some, maybe most, are making more money is irrelevant. The organisation can change the value of a particular job at any time and simply say “the algorithm made me do it”.
But the worker knows exactly what the job is worth at the point of acceptance. Did you actually read the article? The issue is that the offered amount is decided algorithmically through an opaque process not that the worker doesn't know how much they will get paid for it.
A specific user can decide whether or not to take a specific delivery with full information. Following your analogy, it'd be like using some opaque algorithm to set the offer amount when hiring for a job, which is pretty much what happens today.
I don't think the reasons you are listing are valid at all.
1. If they can game it, they should. If that's a problem, then Shipt should fix their algorithm.
2. It's fine to data wrangle your way to an automated model for e.g. your company's growth projection or for predicting where you can best expand to find more customers. It's not okay to use it to unilaterally change pay agreements with your workers or "contractors".
3. The right of an individual to know what they're getting paid for their work outweighs any company's nebulous claim of its algorithm being a trade secret or something vague like that. Can you imagine businnesses actually operating like this? "You can't know what we'll pay you for this job, its ~~seeeecret~~. Just trust us."
It's amazing that anyone would even try to say that.
From now on I'm going to pay my rent according to a secret algorithm of my own devising and my landlord will just have to hope I'm generous this month. I can't have him gaming the lease agreement by only providing the things it says!
Why is this the case? It's well known that ML models are almost always gameable if you know the weights. What right do you have to their algo?
Why not? The contractors know before directly accepting a contract it's value, they can choose to not accept it if they think they're being underpaid?
Except this is how things work at basically all companies? Compensation decisions are secret and only known at offer time, I don't think I've worked for a single company where the specific executive decision reasoning for an offer is given.
Not one of those reasons constitutes a valid excuse. Holy cow.
"Surely in a hotly competitive market" there is no need to hypothesise about what "surely" would happen according to some wishful thinking. We know from countless past observation exactly what happens in any market of low skill low investment labor, wages go straight to the level of the most desperate willing to be slaves and make nothing at all, because there always are enough of those for everyone else to take advantage of, and having no money they have no power to demand better. They can't afford lawyers and ad campaigns and lobbyists and politicians, and they can't afford to strike, and that same wonderful magic market means there is no one better to work for, all employers are essentially the same. Unions and strikes do exist, some places where they are allowed to, and it's always a big news story and a miracle when they actually accomplish even 10% of what they needed to once in a blue moon.
This is straight up an unfair characterization. It's not "slaves making nothing at all", its fair value for their labor as decided by supply and demand. The issue you're highlighting shouldn't be solved by trying to legislate the market to oblivion which always introduces side effects. Just hand everyone a UBI payment a month and be done with it.
I didn't go far enough. Wages don't go right to the poverty line, they go right past it.
Because there are not only always people willing to work for net-nothing, there are actually enough people willing to work for net negative, because they manage to survive in various ways ranging from charity to theft. Mooching off someone else to live without rent or having to buy food, under the table jobs, minor crime, obviously health insurance is completely out of the question. As long as those exist, the market says that this work is worth this cost. The market doesn't know or care how that happens.
Unfair is a funny word to try to apply to the power-wielding benefit-collecting side of this dynamic.
Gig workers fall into a grey area between contractor and employee, depending on the particular jurisdiction and particular job. There are many ongoing legal battles trying to update outdated legal frameworks that don't quite account for modern realities. It is not as simple as you buying lumber.
Maybe not cut in stone, but if the data are derived from the workers’ payout receipts, it would seem likely that this was the amount that was paid out by Shipt. Or do you mean that third parties might be skimming something off after the company pays out?
I mean, it wasn't "a clear case of wage theft" as these weren't wage workers; and in any case it's not like they weren't told ahead of time how much the order would pay.
Do you know that for a fact they were told the total amount including tips, as well as all the details of the job, like items needed and delivery locations ahead of time? Gig apps often withhold info until after a worker accepts, to reduce workers ability to focus on desirable orders. In some jurisdictions Uber drivers don't see the final destination until after they accept a ride.
> It wasn’t a clear case of wage theft, because 60 percent of workers were making about the same or slightly more under the new scheme.
Your statement that "some 30+% are getting at least 10% more" assumes that there is no wage theft - which is not cut in stone.