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The FTC promises to investigate gig companies over wage-fixing

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FTC Chairwoman Lina Khan glances at SEC Chairman Gary Gensler during a House Financial Services Committee hearing. | Photo by Tom Williams / CQ-Roll Call, Inc via Getty Images

The Federal Trade Commission voted today to put gig economy companies on notice, promising to protect gig workers from unfair contracts, pay, and hours.

In a 3-2 vote, Democratic FTC commissioners approved a new policy statement announcing that the agency would “use the full portfolio of laws it enforces to prevent unfair, deceptive, anticompetitive and otherwise unlawful practices affecting gig workers.”

Specifically, the FTC said it would go after companies that misrepresent a worker’s potential earnings or wrongfully use artificial intelligence to evaluate worker productivity. The agency also plans to investigate the industry for evidence of wage-fixing between companies.

“No matter how gig companies choose to classify them, gig workers are consumers entitled to protection under the laws we enforce,” Samuel Levine, FTC director of consumer protection, said in a statement on Thursday. “We are fully committed to coordinating our consumer protection and competition enforcement efforts within the FTC as well as working with other agencies across the government to ensure gig workers are treated fairly.”

In July, the FTC and National Labor Relations Board announced that they would start working together to protect gig workers from unfair and deceptive practices from ride-sharing and food delivery companies like Uber and Grubhub.

Over the last two years, groups like the Gig Workers Collective have formed to advocate for delivery drivers for companies like DoorDash and Instacart. But the groups have struggled to make significant industry changes without the legal protections of a conventional union.

Most gig economy regulation has happened at the state level, the most prominent of those rules being AB5, a California law that makes it harder for gig companies to classify their workers as independent contractors. The bill’s passage inspired other states to introduce their own measures, but federal lawmakers are still playing catch-up.

Last year, Labor Secretary Marty Walsh said that he supported classifying many gig workers as “employees.” Uber and Lyft argue that they employ independent contractors, workers who don’t qualify for payroll protections like official employees. If federal regulators find evidence of wage violations or other unfair and deceptive tactics, they could file lawsuits accusing gig companies of misclassifying workers.

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