As gig work has expanded from a marginal feature of the labor market into a significant one, a question that once seemed narrow and technical has taken on broad consequences: What does it mean to be an employee? The answer shapes whether a worker can join a union, whether they are owed overtime, whether they have recourse if injured on the job, and whether they can collect unemployment if the platform cuts them off. Employers have strong financial incentives to classify workers as independent contractors rather than employees, and many have pursued that classification aggressively, even where the practical reality of the work relationship closely resembles traditional employment. The disputes that have followed, in courts, in regulatory agencies, and in legislatures, reveal not just a legal ambiguity but a policy system struggling to keep pace with how work has actually changed.

To see why defining who is an employee is complicated, consider the disputes around ride-sharing services. Uber, working hard to avoid any ruling that its drivers are employees, calls the people behind the wheel “driver-partners,” but this is an odd use of the term partner. The CEO of Uber earned $24 million in 2022, while only 13 percent of Uber drivers in 2021 earned $30,000 or more. This difference among “partners” is remarkable compared to, say, law firms, where a top partner in a big New York firm earns only about twice as much as an average partner. Presumably, Uber uses the term as a signal of its insistence that the drivers are freelancers and not employees, but it is surprising that it can do this with a straight face.

Rhetoric aside, employee status for Uber drivers is complicated. For most drivers, the job is a part-time supplement to another standard job they hold. In a survey of Uber drivers, Jonathan Gruber reported that 45 percent earned less than $5,000 from all app jobs and only about a quarter earned $20,000 or more annually from all apps. In any three-month period, the survey found, only 22 percent worked more than twenty hours a week for four consecutive weeks. While most drivers are clearly doing the work part-time, for a nontrivial fraction, driving is their only and main livelihood. And the ride-share companies exert considerable control over how the drivers do their work. The importance of this point will become apparent when the relevant law is described below.