State lawmakers across the country, including in Illinois, are considering new laws that would classify more workers as employees rather than contractors in the growing gig economy.
California was the first state to try to regulate companies operating in the gig economy, telling organizations like Uber and Lyft that drivers are employees, not contractors.
There is an enormous difference for both workers and for companies. Employees are protected by certain laws, including minimum wage laws, workers’ compensation and Social Security. Independent contractors are not subject to those same provisions.
The idea that Illinois could follow in California’s footsteps is leading to some uncertainty around the state, said Bryan Gay, chairman of the Illinois Economic Development Association.
He said that could create problems for workers who started gig jobs by choice – noting that many took up contracting jobs or side gigs because the structure of traditional hourly work didn’t fit with their lifestyles.
“Workers who started with some of these programs like Uber, like Doordash, like some of these others, started in those jobs because they needed the flexibility they couldn’t find from a 9-to-5,” he said.
Some people turn to ride-hailing apps and other gigs to help earn extra cash for the holidays, money for school and other needs. Having all of those workers suddenly become employees instead of contractors could create chaos for businesses, he said.
Gay said the worst-case scenario would be for the state to change legal definitions and sweep up Illinois companies into a situation where they are no longer competitive.
Uber, Lyft and other tech companies that depend on independent contractors are fighting back against California’s gig worker bill, also known as Assembly Bill 5.
Gay said he hopes Illinois lawmakers will pause before pursuing similar legislation, as other states are doing.
“I think what it really comes down to is, all eyes are going to be on California and see how things are going to shake out there,” Gay said.