Gig Economy and Worker Misclassification

Gig Economy and Worker Misclassification

Violet Woolf

Worker misclassification as the gig profit model

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The Model

The gig economy business model rests on classifying workers as independent contractors rather than employees, exempting employers from minimum wage, overtime, unemployment insurance, and employer payroll tax obligations that employee status requires. The misclassification is the profit model.

California AB5 established a strict three-part test for independent contractor status that the major gig companies failed. The companies then funded Proposition 22, passing a ballot measure exempting themselves from AB5 at a cost of 200 million dollars in campaign spending. The political economy of misclassification is the political economy of concentrated capital defeating distributed worker interests at the ballot box.

The Analysis

The Mamdani Post covers gig worker misclassification because it is the clearest contemporary example of how the legal classification of work is the site of class struggle. The workers who are misclassified subsidize the investors who are enriched by the misclassification.

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