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A Comparative Law Perspective Bernd Waas / Wilma B. Liebman / Andrew Lyubarsky / Katsutoshi Kezuka Crowdwork – A Comparative Law Perspective HSI-Schriftenreihe Band 22 Bernd Waas / Wilma B. Liebman / Andrew Lyubarsky / Katsutoshi Kezuka Crowdwork – A Comparative Law Perspective Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar. © 2017 by Bund-Verlag GmbH, Frankfurt am Main Herstellung: Kerstin Wilke Umschlaggestaltung: Neil McBeath, Stuttgart Satz: Reemers Publishing Services GmbH, Krefeld Druck: CPI books GmbH, Leck Printed in Germany 2017 ISBN 978-3-7663-6697-9 Alle Rechte vorbehalten, insbesondere die des öffentlichen Vortrags, der Rundfunksendung und der Fernsehausstrahlung, der fotomechanischen Wiedergabe, auch einzelner Teile. www.bund-verlag.de Foreword As the world becomes increasingly digitalized, we are confronted with new, often disruptive, business models also leading to new forms of labour. One feature of this development is the dual phenomenon of crowdsourcing and crowdworking, which spans the whole value-chain of the economy and repre- sents a global labour market. The working conditions in this sector cannot be ignored, because they have a great impact on the situation of established em- ployees, on the competition between crowdworkers, and on the sustainability of the systems of social security. Although it is too soon to give a final assessment of this emerging workplace, we can be sure it will have a significant influence on the labour market, includ- ing (labour) law institutions. Against this background the HSI decided to have a closer look at the factual and legal developments crowdsourcing has brought about in three major legal landscapes. We are very happy and grateful to have found three high-ranking legal experts to fulfill this task. The findings in this study can be seen as a preliminary evaluation of the dynamic and erratic devel- opments in the “platform economy”. Crowdworkers work under very different arrangements (as our authors show), and each case presents a slightly different employment picture, some crowdworkers perhaps amounting to employees, others more like self- employed contractors (and others somewhere in between). But because few crowdworkers currently enjoy social protections, this study also offers a broad variety of legislative options that could work to address such shortcomings within several legal systems. We wish you inspiring reading. Dr. Thomas Klebe Dr. Johannes Heuschmid 5 Contents Foreword ........................................................................................................................ 5 A. Introduction ........................................................................................................ 13 (Bernd Waas) I. The Notion of Crowdwork and Its Different Forms .............................. 13 II. The Extent of Crowdworking ................................................................... 16 III. Opportunities and Risks of Crowdwork ................................................. 17 IV. Problems Associated with Crowdwork and the Need for Regulation ............................................................................................. 20 B. Crowdworkers, the Law and the Future of Work: The U.S. ...................... 24 (Wilma B. Liebman and Andrew Lyubarsky) I. Introduction ................................................................................................ 24 II. The Institutional Setting ............................................................................ 28 1. The Workplace Regulation Debate .................................................... 28 2. The Workplace Legal Regime: From the New Deal to the Present ........................................................................................ 30 3. The Unraveling of the Postwar Social Compact .............................. 32 4. The Data Debate ................................................................................... 35 III. The Boundaries of the Employment Relationship: An “Ambiguous Dichotomy” ................................................................... 38 1. The Common Law Test ....................................................................... 40 2. The Suffer or Permit/Economic Realities Test .................................. 44 3. Rulings on Platform Workers as Employees: “Round Holes, Square Peg”? .............................................................. 47 a) CrowdFlower ................................................................................. 47 b) Uber and Lyft ................................................................................. 48 4. A Note About Class Action Litigation and Arbitration Agreements ........................................................................................... 53 IV. Crowdwork Platforms: Four Different Models ...................................... 57 1. Aggregator: Amazon Mechanical Turk ............................................ 59 2. Facilitator: Upwork .............................................................................. 64 3. Governor: Topcoder ............................................................................ 69 4. Arbitrator: InnoCentive ....................................................................... 74 7 V. An Examination of Crowdwork Realities and Legalities ..................... 78 1. Opportunities and Risks ..................................................................... 78 2. Legal Analysis: Employee or Independent Contractor? ................. 84 a) Amazon Mechanical Turk ............................................................ 85 b) Upwork ........................................................................................... 89 c) Topcoder and InnoCentive ........................................................... 93 3. Platform Accountability: A Joint Employer Analysis? ................... 96 4. A Note about Platform Legalities ...................................................... 99 VI. The Debate over the Future of Work in the U.S. .................................. 101 1. Rethinking Employment: An Intermediate Classification? .......... 102 a) An Intermediate Category in Canadian Law ........................... 103 b) An Intermediate Category for U.S. Law? Pro and Con .......... 104 c) An “Independent Worker” Proposal and Its Discontents ...... 106 2. Reexamining the Link between Social Protections and Employment ....................................................................................... 109 3. Restoring Worker Voice and Power ................................................ 115 a) Emerging Worker Activism ....................................................... 115 b) Open Source Collective Action: New-Generation Platforms for Voice, Exit and Advocacy in the Gig Economy ................. 118 c) Bargaining Power for Independent Contractors ..................... 121 VII. Conclusion and Recommendations ....................................................... 127 1. Sectoral Regulation of Crowdwork Platforms ............................... 130 a) Compliance with Wage and Hour Standards .......................... 131 b) Recordkeeping and Disclosure Requirements ......................... 133 c) Payment Protection ..................................................................... 135 d) Voluntary Initiatives ................................................................... 136 e) Areas for Additional Study ........................................................ 137 2. Broader Reforms for the Changing Workplace ............................. 138 C. Crowdwork in Germany ................................................................................ 142 (Bernd Waas) I. Legal Status of Crowdworkers ............................................................... 142 1. Legal Framework: The Triangular Relationship of Crowdworker, Platform and Crowdsourcer .................................. 142 2. The Crowdworker as Employee ...................................................... 146 a) Concept of Employee in Germany ............................................ 147 b) Legal Qualification of Crowdworkers ...................................... 150 aa) Relationship Between Crowdworker and Crowdsourcer ...................................................................... 150 bb) Relationship Between Crowdworker and Platform ....... 150 8 cc) Platform and Crowdsourcer as (Joint) Employers? ........ 157 c) Applicable Labour Law Provisions ........................................... 158 3. The Crowdworker as an Employee-like Person ............................ 160 a) “Employee-like Person” .............................................................. 160 b) Legal Qualification of Crowdworkers ...................................... 161 aa) Legal Prerequisites of “Employee-like Persons” ............ 162 bb) Applicable Provisions ......................................................... 162 4. The Crowdworker as Homeworker ................................................ 163 a) The Concept of Homeworker ..................................................... 164 b) Legal Consequences of Qualification as Homeworker ........... 167 c) Legal Qualification of Crowdworker ........................................ 170 II. Review of the General Terms and Conditions ..................................... 171 1. Scope of Review of General Terms and Conditions
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