All the World’s a Platform?: Some Remarks on 'Marketplace Platform' Employment Laws

Abstract

This paper addresses the enactment of marketplace platform laws, which have arisen as a remarkable feature of the "gig" economy in recent years. A marketplace platform law decides the question of whether an individual worker is an independent contractor or an employee — an ongoing controversy in all employment law, including workers’ compensation law — by emphasizing factors other than those normally considered in traditional legal analyses. As of this writing, seven states appear to have enacted marketplace platform laws.

In short, marketplace platform laws — developed substantially and lobbied aggressively by the company Handy, Inc. — make it much easier to classify a worker as an "independent contractor" rather than an "employee." Essentially, as the paper shows by analyzing one such law, if a company uses "online enhancements" in the operation of its business it may qualify as a "marketplace contractor" rather than an "employer," whatever the degree of control of working conditions it may exercise de facto in the workplace. The paper shows how, in the case of workers' compensation law, this de-emphasis of the control factor in assignment of responsibility for workplace injury flies in the face of original workers' compensation theory. The development is also at complete odds with the "ABC" employee test, which not only emphasizes the control factor but places the burden of proof on employers to show absence of control. However one may come down on the "employee status" issue, there seems no denying that, in light of California's substantial adoption of the ABC test in broad swaths of its employment law, what rights a worker has to legal protection is increasingly dependent on the worker's state of residence or employment.

Keywords: gig economy, workers' compensation, employee status, independent contractor, workers' compensation

JEL Classification: J30, J28, J81, J83