Buttigieg wants to expand California’s gig worker law nationally

In announcing his labor and employment policy platform last week, South Bend, Ind. Mayor and presidential candidate Pete Buttigieg proposed codifying the "ABC" test established in last year's California Dynamex decision nationwide, giving independent contractors -- specifically gig economy workers -- significant federal protections as employees.

But legal experts said Monday the mayor's campaign promise could be the start of a larger conversation surrounding national labor policy if other candidates follow suit and propose similar plans.

Indeed, many of Buttigieg's fellow candidates have already aligned themselves with gig economy workers, tweeting in support of Lyft Inc. and Uber Technologies Inc. drivers who went on strike last May, said Greg Grisham, of counsel in Fisher Philips' Memphis office.

"This is a pretty comprehensive proposal," said Grisham, whose practice covers employment law. "It not only speaks to gig economy workers, but also addresses some larger issues. So I see others copying that in the weeks and months to come."

It also highlights the burgeoning presence of gig labor, which include more than 87.5 million workers generating more than $1.6 trillion annually, according to a U.S. Bureau of Labor Statistics report.

With so many workers exposed to discrimination and wage tampering without the ability to unionize, it makes sense to instill a modicum of regulation, said Chris Lilly, an employment lawyer with TroyGould PC in Los Angeles.

"This industry has come on so quickly and so suddenly that it's not very well regulated," said Lilly. "And this is one way to get to bring some regulation to it."

But Jeffrey S. Horton Thomas of Akerman LLP warns against any rush to codify the ABC test, which presumes workers are employees and only independent contractors if they are a) free from the hirer's control and direction, b) work outside the usual course of the hirer's business, and c) engage in the same kind of work as the hirer independently.

For starters, many are happy being independent contractors, Thomas said.

"Many of the workers want to take home gross pay, want to work for more than one principal and have the freedom to work when they want to," Thomas said.

Codifying the ABC test nationally would also devastate the current business model for many gig employers, Thomas said. Reclassifying workers forces employers to cover the costs of benefits and payroll taxes, leading to eventual workforce reductions and higher prices for consumers.

"That's one of the unintended consequences," he said. "You're going to have businesses look for ways to employ fewer people."

Though merely a proposal, Consumer Attorneys of California President Mike Arias said he couldn't fathom such a bill making it through Congress.

"Employment arguments are usually states' rights types of arguments," Arias said. "Every congressman and every senator from every state would have to look at their own systems and decide whether it would be an improvement or impinging on their state's rights."