Turker: Contractor or employee?

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On Monday I attended a crowd-sourcing Meetup with the funny (and as it turned out inaccurate) title of The Distributed Distributed Work Meetup. The idea was to hear talks about various crowd-sourcing topics from speakers in Seattle, San Francisco, Boston and New York. Technology didn’t cooperate, and were left to our own devices, which meant to eat, drink, and listen to fascinating and provocative talk by Alek Felstiner on a range of legal questions surrounding crowd-sourcing platforms such as Amazon’s Mechanical Turk (AMT).

I cannot do justice to the legal issues, in part because so many of them remain unresolved. I will, however, report on a number of questions raised during the talk and on some of the potential precedents for this kind of work. One reason to discuss this topic is that there are some concerns that the Turkers are being exploited by those who pay for the work, as the value of the work to the company sometimes seems much higher than the rate the worker is paid.

Yet many people chose to do this work freely, and seem to enjoy doing it, and certainly there are many companies and individuals, profit-oriented and academic, who benefit from this service. The questions raised in this talk bore on the legal relationship between the organizations or individuals requesting work and those providing it.

The existing body of labor law, crafted from the 30s to the 50s is wholly inadequate to account for the phenomenon of crowd-sourcing. These laws, laws that define the obligations of employers and employees, are based on the assumptions of long-term, stable, one-to-many relationships between employers and employees. They characterize such aspects as minimum wage, overtime, right to organize, etc.

One important class of questions that arises from this law is whether workers who do crowd-sourcing work are contractors or employees, because if they are ruled to be employees, they are entitled to all sorts of rights under the law that do not apply to contractors. Yet the existing law is ill-equipped to deal with these issues. With respect to crowd-sourcing work, there are some major problems, of which I will summarize a couple. See Alek’s article for the complete details.

Jurisdiction

The legal issue is who has the right to adjudicate disputes. This is of the key  issues that needs to be addressed, and of the hardest to nail down. Consider that a typical Mechanical Turk job may involve four different, geographically disparate, parties, at least one of whom may be able to move freely from state to state on an hourly basis. The four parties are the company who has a job that needs to be done, the company that may help them structure the tasks, Amazon that provides the platform and brokers the transaction, and the person actually doing the work. Each of these entities may be governed by a different set of laws.

Employment status

While the relationship between the firm creating the HIT and the vendor (e.g., Amazon) is governed by a terms of use contract, as is the relationship between the vendor and the worker (often by more than one), the relationship between the firm and the worker is often not legally specified. This uncertainty matters a great deal in employment law.

If the worker is a contractor, he is not governed by any of the regulations (e.g., FLSA, NLRA, etc.) that constrain the relationship between the employer and the employee. There is a multipart test of what characterizes an employee rather than a contractor. From Alek’s article, quoting a U.S. Department of labor document:

1) The extent to which the services rendered are an integral part of the principal’s business.
2) The permanency of the relationship.
3) The amount of the alleged contractor’s investment in facilities and equipment.
4. The nature and degree of control by the principal.
5) The alleged contractor’s opportunities for profit and loss.
6) The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
7) The degree of independent business organization and operation.

For example, it may be argued that since a person doing work through Amazon’s Mechanical Turk cannot (by the terms of use) delegate that work to another person, that fails test #5 above that stipulates that the alleged contractor should be able to determine how best to perform the job, including hiring subcontractors, etc. Test #7 may also be in play.

Another example: if a company’s business relies in large part on the services of Turkers, then test #1 may be applicable.

Interesting analogies

During the talk and the subsequent Q&A, several analogies to crowd-sourcing were mentioned, and these deserve a quick summary. Again, these are open, rather than resolved, issues, and the validity of these analogies as legal precedent has not been established. Yet there are some compelling parallels:

  • Day laborers. These people enter into short-term contracts for a specified hourly wage, often with multiple employers in a single day. They may freelance, or may be hired through a third party.
  • Seasonal farm workers. The labor of seasonal farm workers may be managed by several independent parties, which the courts have treated as “joint employers.” Alek argues that a similar case can be made to include AMT as an employer because Amazon “in the best position to regulate employment and labor standards, since it maintains the platform, writes the Participation Agreement, and controls who can access AMT.”
  • Company towns. Company towns were towns effectively run by large employers for their workers. Employers deducted money from employees’ salaries for rent and other services, and employees had to shop in the company’s stores. How is this similar to Amazon? Well, AMT allocates the work, and Amazon also acts as a bank, paying out fees for completed work.

The talk covered much more ground, but the main theme was that the law is way behind the times, and no good legal precedent has been established. It will be interesting to see how this plays out, and what impact legal decisions will have on this industry.