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FTC Issues a Crackdown Warning Over Exploiting Gig Workers

The Federal Trade Commission is approximately to crank up enforcement against businesses that exploitgig workers.

The agency announced last Thursday in a 17-page policy statement that it’ll start targeting companies whotakeadvantage of gig workers, specifically those that take part in “unfair, deceptive, or anticompetitive practices.” Which includes things likeemployee misclassification and unfavorable contracts to wage-fixing and concentrated markets.

That isn’t necessarily welcome news for a few businesses. Indeed,FTC Chair Lina Khan, has beencriticizedbybusiness groups concerning the agency’s purported overreach. The U.S. Chamber of Commerce sued the FTC in July, accusing the agency of too little accountability andarguing that the agency”is pursuing an aggressive agenda with far-reaching implications for American businesses and the economy.”

Khan is pressing ahead though. On the list of agency’s prime targets arecompanies thatmisclassifyworkers as independent contractors if they are in fact employees.Contractors receive fewerbenefits weighed against full-time staff employees, includingwith medical health insurance and paid time off. It is a cost-saving tacticbut a violation of both federal and state law–and it could get expensive for the ones that get caught.Take the case of Uber,who recently settled for $8.4 million in a single case ofworker misclassification claims.

The FTC’s position is that gig workers aren’t second-class employees. “Regardless of how gig companies elect to classify them, gig workers are consumersentitled to protection beneath the laws we enforce,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection said in a statement. “We have been fully focused on coordinating our consumer protection and competition enforcement efforts within the FTC and also dealing with other agencies over the government to make sure gig workers are treated fairly.”

As the exploitation of gig workers is frequently connected with larger companies such as for example Uber and DoorDash, any business employing gig workers should become aware of the FTC’s expanding enforcement priorities.

The agency didn’t single out any business,however in her statement FTC Commissioner Rebecca Slaughter referenced a recently available lawsuit against Amazon that led to the agency recovering a lot more than $60 million to cover back Amazon Flex drivers who didn’t receive their tips.

Gig workers is still huge contributor to nation GDP. Sixteen percent of Americans have reportedly earned money by taking part in the gig economy, the FTC cites.Asurvey from Mastercard estimates that the gig economy will spur $455 billion in yearly sales come 2023.

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