Lawsuits About What It Means to Be an Employee Could Shape Future of Industry

The Economist opines that lawsuits over what it means to be an employee should shape the future of several industries.

For example, ride-sharing service Uber is facing cases, including a ruling by the California Labor Commissioner, that its drivers are employees, not independent contractors. McDonald's is being treated as a joint employer, together with franchisees, by the National Labor Relations Board's general counsel.

The problem, The Economist argues, is that employment law is based upon the Fair Labor Standards Act, which dates from 1938. However, the "'on-demand' economy is all but obliterating [the distinction between employees and independent contractors], by letting people sell their labour and rent out their assets—from cars to apartments—in a series of short-term assignments arranged by smartphone app."

In light of the fact that a divided Congress is not likely capable of updating labor law anytime soon, The Economist suggests that judges should be as conservative in possible in ruling that independent contractors are employees in order to not snuff out the on-demand economy.