Rights vs. Emerging Gig Economy
In 2012 Christopher Otey, an Astoria resident from Oregon sued Crowdflower for violating the Fair Labor Standards Act on the basis that the company paid less than the $7.25 minimum wage to employees. He used Crowdflower as a full-time position since he could not find work. According to the article Tech Company CrowdFlower Denies Labor Violation, Companies like Amazon’s Mechanical Turk and Crowdflower allows users to complete “minute, repetitive tasks that are too subjective and subtle for computers to perform.” These services allow people to verify datasets, identify facial features, and perform psychological surveys in exchange for a small pay – as low as $0.01 per task. These tasks pay on a completion basis which means that only that payment is made for a task. This translates to an average hourly income to only $1–$2 dollars that can be through gift cards or even rewards points. While Otey’s case was completed with a settlement, new cases have emerged since 2012, and are beginning to question where independent contractors of the newly emerging gig-economy stand when it comes to federal work protections.
Despite Otey using the platform as full-time work, federal laws on minimum wage and other benefits do not apply to him since everyone who completes the work in these platforms is hired as an independent contractor, According to, The Internet Is Enabling a New Kind of Poorly Paid Hell Otey is not alone, 25% of the users engaged in crowdsourced work are doing so because there is a little opportunity available in their community and/or at their education-level. Meanwhile, companies like Crowdflower receive a lot of their profits from the fact that the Fair Labor Standards Act does not protect independent contractors, reporting record earnings when this case was settled in 2012. While under the current system, no specific laws are being broken by Crowdsourcing companies, some employees that engage in full-time work, rather, as a supplemental income are not receiving the benefits they believe they should be federally obligated. Cases such as Otey’s are hoping to change the classification that these employees fall under so that they can escape the below-poverty income that they are receiving.
Otey’s settlement didn’t revise any current laws for crowdsourced work, but it did bring attention to a newly emerging problem and bring about more class-action lawsuits against the company and others. The gig economy has expanded greatly, the number of independent contractors that participate in Food delivery, Uber driving, and crowdsourced work full-time is increasing and demanding the attention of the federal government. In the article, California Bill Makes App-Based Companies Treat Workers as Employees is changing the benefits and minimum-wage requirements of independent contractors working for such companies through the Gig Worker Law, however, it is not yet clear what specific companies will fall under these laws. Recently, a judge said that “it is now clear” Lyft drivers should be considered employees in a court case of Lyft drivers in California against Lyft. However, the lawsuit started against Lyft by drivers has been struck down to become a class-action lawsuit. The public interest in court cases related to the gig-economy gives optimism that future court cases will lead to greater protections for employees. Positively, Otey’s case has brought a new class-action lawsuit against Crowdflower in 2015, which paid out employees ‘misrepresented as independent contractors.’ Negatively, lawsuits demanding proper representation as employees in crowdsourcing are getting settlements rather than a change in legislation.
According to A Framework for Ethical Decision Making, It seems that Otey is applying the Social Contract Theory and Kantism. His reasoning is since companies like Crowdfire and Amazon’s Mechanical Turk operate within the U.S. and have a workforce that is working as full-time employees, they should be compensated and classified as such. Companies should be part of the social contract of providing reasonable compensation to their employees by operating by the U.S. labor standards. Since the U.S. doesn’t explicitly cover his work under The Fair Standards Act, he has an element of Kantianism: federal legislation should be revised and governed by “universal moral laws of goodwill and duties and obligations” Otey’s case has revealed the scope of how many people struggle to support their livelihood and some unfair tacts that crowdsourcing companies engage in. His situation, in particular, makes his case justified in seeking charges against Crowdflower. While the result of his case ending in a financial compensation settlement is not changing the laws for the better, his case has brought on public support changing the assumption that crowdsourced work is supplemental to another source of income which hopefully changes the legal paradigm future members of the gig-economy operate in.