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Testimony Before U.S. House Committee on Small Business on Gig Economy Workers

May 24, 2016

In testimony before the U.S. House Small Business Committee, Joe Kennedy argued that the traditional distinction between employees and independent contractors is discouraging companies from offering gig economy workers important support, particularly when it comes to taxes, and Congress should update labor law to address this. There are three possible paths forward for Congress to reform labor law for the gig economy:

1.) Adapt it. Create a new category of worker, between full-time employee and independent contractor. While this would be an improvement on the current system, it also risks replacing two rigid categories with three rigid categories, which still may not provide an optimal fit for all work arrangements.

2.) Fix it. Revisit each of the country’s major labor laws and carefully tailor them to achieve their specific goals. This would be ideal, but it would involve a long and difficult political process.

3.) Suspend it. Draft a carve-out to temporarily exempt gig-economy Internet platforms from ill-fitting labor laws. This would be easier to enact and would give Congress time to assess whether platform companies respond in ways that improve the welfare of gig-economy workers.

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