FTC wants to protect gig workers from ‘unfair or misleading’ algorithms

The Federal Trade Commission is making its own offer to protect gig workers from exploitation. The regulator has adopted a policy statement detailing how it will address gig worker issues. The FTC plans to intervene in cases of misrepresentation of wages, costs, benefits and working conditions. Officials also expect to intervene with “unfair or misleading” algorithms, harsh contracts and anti-competitive behavior such as wage-fixing and mergers creating monopolies.

The Commission said classifying workers would not affect enforcement, so companies cannot avoid repercussions by classifying people as contractors instead of employees. Violators may have to pay fines and change their practices, and the FTC could partner with other government agencies (such as the Department of Justice and the National Labor Relations Board) to resolve issues.

There are gaps. It might be difficult for the FTC to prove algorithm-based abuse, for example, and it’s unclear what non-contractual “restrictions” might harm workers’ freedom of movement. However, it could still serve as a warning to gig companies that may be hiding high operating costs, fighting union organizing efforts or colluding with rivals to keep wages low.

The FTC isn’t alone in hoping to improve the lot of gig workers. A bipartisan congressional measure, introduced in the House and Senate in February, aims to provide portable benefits to gig workers. Last year, the Department of Labor repealed a rule that made it harder to protect the labor rights of these workers. States and cities have also filed lawsuits and taken other measures to strengthen working conditions. However, the FTC’s policy provides additional nationwide protection that could further discourage attempts to exploit the gig economy.

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Sharon D. Cole