There remains confusion regarding whether employers should have mandatory arbitration clauses in employment contracts. On its face, arbitration agreements seem to be a win for employers. It allows employers to avoid costly class-action lawsuits from employees filing wage and hour claims. Instead, employees agree to resolve complaints individually through arbitration. Last month, the Supreme Court found that arbitration agreements did not violate federal law.
Part of what makes Uber, Lyft, Grubhub and other "gig economy" companies so profitable is that they have relatively few employees. The vast majority of these companies' workforces are made up of independent contractors. Since they are not employees, they are not entitled to minimum wage or overtime protections, much less workplace benefits such as workers' compensation, access to unemployment insurance, shared payroll tax liability or employer-sponsored healthcare.