An open letter to Andrew Puzder, nominee for Labor Secretary
Congratulations on your nomination as Secretary of Labor. Presuming your confirmation by the Senate, you’ll have the opportunity to define the Trump Administration’s labor policies at a time when America’s workforce is evolving to meet the challenges of a digital world.
You will undoubtedly have a lot on your plate, balancing the interests of workers and businesses. It is a daunting task, particularly with the mess of red tape that stands in the way of innovation and opportunity. As you set out to rethink how we approach labor in the digital age, I hope you will keep the gig economy top-of-mind.
The gig economy — in which independent workers sign on to provide their skills on demand for short-term projects — is a 21st century phenomenon being hamstrung by Depression-era laws and regulations, to the detriment of workers, businesses and the American economy.
This is no small movement — it represents a multi-billion-dollar disruption of the labor market and brings real-world benefits. Businesses can utilize a faster, more specialized workforce, and gig-workers gain the flexibility of working on their own terms. This year, CNBC estimated that the number of gig-economy workers grew 27 percent faster than payroll employees over the past two decades.
It’s time for our labor laws to catch up with reality. Those laws, which date from the era when football players wore leather helmets, are inadequate for today’s fast-paced economy. On-demand labor simply doesn’t fit very clearly into the current tax classifications of employees or independent contractors.
Companies and workers who want to take advantage of this productive system of employment waste time trying to contort their work into a poorly suited regulatory system. Opportunities are delayed or lost to the complexity.
This important and growing segment of the American economy is in urgent need of relief from tangled regulations that stifle its true growth potential. Research that was just released by my company, Work Market, shows that while businesses value gig workers, one in two business leaders believe the use of on demand workers leaves their business open to significant compliance risk.
Misclassifying workers could lead to violations of the Fair Labor Standards Act, the Affordable Care Act and other Federal rules, exposing companies to costly civil litigation and fines. Under that kind of threat, employers are naturally apprehensive about hiring such workers.
Based on my conversations with both workers and businesses of all sizes, I’m writing with a suggestion for addressing this critical segment of the economy, affording businesses and workers the confidence they need to pursue new ways of approaching work.
I’ve heard a lot of different suggestions on how to overcome these unnecessary obstacles. For me, the best solution is simple and clear: do away with worker classification entirely: do work and get paid, no matter the mode.
Eliminating worker classifications can release the on-demand economy from limbo. Regulatory complexity and confusion will fade away. Businesses and workers will have more flexibility. The gig economy will be able to create more opportunities, and more work will get done.
Abandoning the failed worker classification system will help us reimagine the way we work and do business in this country, lower the risks the costs of regulatory compliance, create jobs and spur economic growth.
You’ve said serving in the forthcoming cabinet would be “the most fun you could have with your clothes on.” I’m encouraged by that kind of talk, Mr. Puzder, because we’ll need someone with that level of enthusiasm to make real changes in how we build a truly modern economy.
Every indication shows that the Trump Administration will have appetite to ease unnecessary regulatory burdens like those that hinder the gig economy. With a like-minded Congress, I am confident that it’s possible to make real progress toward more productive regulation of the gig economy.
I offer any support I can provide to assist the administration in unlocking the full potential of on-demand labor. I’m ready, Mr. Puzder. So are America’s workers and businesses. Let’s make America work again.
President and Co-Founder, Work Market