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The Issues: Immigration and the ‘Gig’ Economy

Boyd School of Law’s Ruben Garcia shares insight on the employment law issues that loom in this year’s election

Business & Community  |  Sep 13, 2016  |  By Greg Lacour
Workers set up scaffolding

(R. Marsh Starks/UNLV Photo Services)

Jobs are a perennial political issue: How many are available, how much they pay, how to create more. But in recent years, the debate over jobs and government regulation of employment has merged with concerns over immigration and the rise of the so-called “gig economy” that relies on independent contractors for labor instead of employees.

It’s an especially urgent issue in Southern Nevada, with its large population of Latin American immigrants living and working service-industry jobs — at times for more hours and lower pay than the law allows. Inconsistent enforcement of labor laws at the federal and state levels allows the issue to persist. When regulators don’t enforce labor laws, the only recourse for workers is to sue, yet most can’t afford legal assistance or are afraid of retaliation.

Our expert

Ruben Garcia has been a professor at UNLV’s William S. Boyd School of Law since 2011.Ruben Garcia The native of El Paso, Texas, came to UNLV from California Western School of Law in San Diego, where he was a professor and director of the Labor and Employment Law Program. Garcia specializes in labor and employment and constitutional law, subjects he teaches at the Boyd School of Law.

A few facts

  • Estimates of the population of undocumented immigrants in the United States generally range from between 11 and 14 million. The Pew Research Center places the number as of 2014 at 11.3 million, down from a peak of 12.2 million in 2007.
  • Nevada has the nation’s largest shares of undocumented immigrants in its labor force (10 percent) and overall population (8 percent).
  • Wage theft — employers’ denial of wages and benefits to workers through failure to pay for overtime, forcing employees to work off the clock, and other illegal but common tactics — costs American workers hundreds of millions of dollars per year, the Economic Policy Institute reported in 2014.

Why this matters

What does noncompliance with labor laws cost the economy?

The combination of wage theft, misclassification of workers, and inconsistent enforcement, Garcia said, robs states and the nation of hundreds of millions in needed tax revenue, employee productivity, and contributions to Social Security, which is funded through payroll taxes. It also hurts private businesses’ competitors by forcing them to take similar steps and local economies by denying consumers purchasing power from wages that haven’t been paid.

Why is it so important in southern Nevada?

Because Las Vegas and the surrounding area depends so much on immigrant workers for labor, Garcia said. Much of that workforce consists of undocumented immigrants, which tempts employers to commit wage theft, harming the overall economy. Maltreatment can also force immigrant workers to states such as California, which regulates labor laws more tightly and is a safer bet for immigrant laborers who want to make sure they don’t get cheated out of their wages. “I tell my students,” Garcia said, “your rights largely depend on where you live.”

What misconceptions about, say, immigrant work and contract employment need to be corrected?

“A lot of people think immigrants are in competition for their jobs, when they’re really competing against other immigrants,” Garcia said. “The rate of undocumented immigration has slowed tremendously. This mainly affects people who are long-term residents.”

For contract employees, misclassification is a greater issue. “There’s this common misconception that you can sign away your right to a minimum wage. The main legal test of employee versus contractor is control over working conditions … and people, including many people in the so-called ‘gig economy,’ are under the impression that if they sign away their rights to a minimum wage, it’s final and binding, and it’s not … In most cases where there’s litigation, people are held to be employees in the end.”

Is the problem getting worse?

“Employers are increasingly seeking a way to not have real employees,” Garcia said. Organized labor, once a key counterweight to employers in labor relations, has crumbled over the last few decades. The rate of union membership in the private sector stands at 6.7 percent. Nevada is a longstanding “right to work” state, although many casino workers in the state have strong protections through membership in the Culinary Workers Union.

Without a union contract or strict enforcement of labor law, employers are going to continue to develop systems to hire workers under independent contracts. One clear example, he said, is the dramatic shift away from benefits-eligible employees in taxi services to independent contractors under ride-sharing services. “Does the law need to be changed? That’s not really being addressed by either party. As long as the statutes favor finding workers as employees, there will continue to be litigation over the new schemes employers try.”

How can cities like Las Vegas ensure that workers are paid a living wage?

 Certainly, federal and state authorities should do a better job of enforcement to make sure employers aren’t finding ways to skirt the laws, Garcia said. He also noted that adopting a minimum wage higher than the federal rate of $7.25 per hour has improved conditions in cities such as Seattle, San Francisco and Los Angeles. But it’s far from clear whether Nevada will pass a higher minimum wage in the 2017 legislative session. Much will depend on the outcome of the November elections and the stances on labor issues of the candidates who prevail.