BETHLEHEM, Pa. — As Congress considers legislation that would redefine the definition of an employee and the protections that come with it, U.S. Rep. Ryan Mackenzie hosted a roundtable discussion Friday to hear from local workers about their experience in the gig economy.
Mackenzie, R-Lehigh Valley, and U.S. Rep. Tim Walberg, R-Michigan, spoke with analysts, local workers and local business owners about their time as independent contractors. It was held at Venture X, a shared workspace company on South New Street.
The two lawmakers said they wanted to dispel myths that people don't want to be independent contractors, which comes with less federally assured benefits like overtime pay but offers greater flexibility.
"I am agnostic to what an individual chooses to do, but we want to make sure that those options are out there. Whether they want to be a W2 employee or an independent contractor, we just want to make sure the opportunities are out there," Mackenzie said.
Earlier in the day, the two congressmen said they tagged along with Hector Soto as he made deliveries for DoorDash.
The Bethlehem father said he picked up the gig in 2020 to compensate for a decrease in work hours during the pandemic. While his full-time job has returned to his normal workload, he decided not to drop his food delivery work, he said.
"It had the flexibility I needed to fit into my schedule while providing me with another source of income to support my family," Soto said. "It's how we started developing savings. It's really helped improve my quality of life."
"It's how we started developing savings. It's really helped improve my quality of life."Hector Soto, delivers for DoorDash
Similarly, Keila Rodriguez, an independent Realtor who works for the Northampton-based Lehigh Valley Just Listed, praised the personal freedom her job provides. By not having to stick to traditional 9 to 5 work hours, she's better positioned to take care of her family and volunteer with her local church, she said.
"Now I have control over my financial future while building a brand that stands out in this competitive market," she said.
Importance of flexibility
Patrice Onwuka, director of the Center for Economic Opportunity with the Washington-based non-profit Independent Women's Forum, said flexibility is unusually important for women.
Societal norms often leave them to pick up extra responsibilities like child care and taking care of ailing parents. The gig economy creates more ways for women to remain in the workforce while balancing their other responsibilities, she said.
That flexibility is becoming a common demand across the workforce, not just for independent contractors.
Nancy Dischinat, executive director of the Lehigh Valley Workforce Development Board, said employees have forced companies to reconsider how they operate after enjoying freedoms like working from home during the pandemic.
"They're trying to set more of the rules than the employer has. It's been a real dynamic shift," she said.
Other panelists included Terry Wallace, owner of Venture X; Alex Harper, director of government affairs at the PA Chamber of Business and Industry; and Emily Greene, state director of Americans for Prosperity - Pennsylvania. The conservative lobbyist group was among Mackenzie's largest political donors in last year's congressional campaign.
National debate
Both Mackenzie and Walberg sit on the U.S. House Committee on Education and Workforce, which is considering two bills that would alter how workers are classified under federal law. Walberg is the committee chairman.
For decades, the difference between an independent contractor and an employee was fairly straightforward. Employees are economically reliant on their employers but had to more closely align with their employers' demands such as when and where they worked.
In return, they were entitled to protections such as minimum wage and overtime pay. Independent contractors aren't guaranteed those same protections but have greater flexibility to negotiate their own work conditions and compensation.
But the emergence of the gig economy in the past decade has blurred those lines and changed how America works.
The emergence of the gig economy in the past decade has blurred lines and changed how America works.
Tech companies such as Airbnb and Uber have become billion-dollar corporations by creating platforms where customers could connect with independent contractors for specific services. However, that's limited companies from providing their independent contractors with benefits, something only available to employees under federal law.
"The Fair Labor Standards Act was enacted in 1938, a time when Congress did not contemplate the idea of Uber, of Lyft, of DoorDash, of Shipt, of Instacart. We could go on and on with those entities that have become platforms that allow workers to earn income how and when and where they want to," Walberg said.
The proposed Modern Worker Empowerment Act would alter provisions that distinguish employees from independent contractors. It would allow businesses to set deadlines that independent contractors must meet and eliminate considerations such as whether the independent contractor needs insurance or is required to meet health and safety regulations.
The proposed Modern Worker Security Act would allow companies to contribute to an independent contractor's portable benefits account, a special bank account that could be used for benefits such as health insurance or retirement savings. Benefits of that nature are currently limited to employees.
Striking the right balance between protecting workers while allowing people the freedom to decide who they work for has become a question across the country.
Last year, Pennsylvania launched a first-in-the-nation portable benefits pilot program that allowed DoorDash's independent contractors to receive an extra 4% of their earnings before tips to place in a special bank account. Participants had free rein to spend the money as they saw fit, including using the money for health insurance, paid-time off or retirement savings.
Katherine Rodriguez, the head of national policy engagement for DoorDash, said the final data from the pilot program is being organized.
