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Federal Register / Vol. 86, No. 4 / Thursday, January 7, 2021 / Rules and Regulations
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independently by choice and those who do so by necessity such as needing supplemental income and found that both groups report being happy with the flexibility and autonomy of their work.228 Similarly, Kelly Services found that free agentsi.e., workers who derive their primary income from independent work and actively prefer itreport higher satisfaction than traditional workers concerning overall employment situation; work-life balance; opportunities to expand skills;
and opportunities to advance career.229
Many commenters agreed that the scheduling flexibility afforded to independent contractors is of importance to many of these workers.
WPI pointed out that many independent contractors require flexibility to balance work and other obligations. They cite a recent report that found 48 percent of freelancers report being caregivers, while 33 percent report having a disability in their household. 230 Dr.
Palagashvili discussed the significance of independent contracting work for women, who tend to be the primary caregiver, and thus value scheduling flexibility. She cited several papers demonstrating the importance of flexible work arrangements for women.
For example, a survey by HyperWallet found that 96 percent of women indicate that the primary benefit of engaging in platform-economy work is the flexible working hours.231 SHRM
pointed to their survey that found that 49 percent of external workers chose that work arrangement for the ability to set their own hours.232
Conversely, other commenters asserted that valuing flexibility is not relevant as a benefit to a worker who is classified as an independent contractor.
The Department believes that non228 McKinsey Global Institute, supra note 89 at 10. The McKinsey survey found that, while those working independently out of necessity report being happier with the flexibility and content of the work, they also report being less satisfied with their level of income level and their income security. Id. The Department believes this rulemaking is unlikely to negatively impact the average income level of such workers by encouraging independent contractor opportunities.
As discussed above, there are data indicating that independent contractors, on average, may earn higher hourly wages than employees. Nor is rulemaking likely to negatively impact workers income security, on average see Section VIE2viii.
229 Kelly Services 2015, supra note 89.
230 Upwork, Freelance Forward 2020: The U.S.
Independent Workforce Report September 2020.
231 HyperWallet. The Future of Gig Work Is Female: A Study on the Behaviors and Career Aspirations of Women in the Gig Economy, 2017, https www.hyperwallet.com/app/uploads/HW_
The_Future_of_Gig_Work_is_Female.pdf.
232 SHRM and SAP SuccessFactors 2019, supra note 200.

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pecuniary benefits like flexibility are very important to workers and should receive adequate attention in this RIA.
Research has shown that flexibility is a criterion workers consider when evaluating job offers.233
The PA L&I wrote that it is inappropriate to present flexibility for independent contractors as a replacement for lower wages and no benefits. PA L&I also stated that the Department does not discuss independent contractors counteracting loss of stability in income, location of work, and frequency and schedule of work and instead simply presumes that workers prize flexibility over stability without citing any evidence. The Department notes that it examined numerous studies that directly address, and provide evidence regarding, the tradeoffs many independent contractors voluntarily make to attain flexibility. To that point, a survey submitted by CWI
found 61 percent of independent contractors prefer the flexibility to choose when and where to work over having access to a steady income and benefits. 234 Additionally, the workers who value flexibility will be the ones drawn to those independent contracting arrangements that provide flexibility.
The Washington Center posited that in many industries, such as trucking and deliveries, the flexibility benefits for independent contractors are small because workers often do not have control over their routes or work hours.
This was echoed by the UFCW, who pointed out that in retail the use of justin-time scheduling limits the scheduling flexibility for workers classified as independent contractors. The Department acknowledges that the flexibility benefits may differ across industries, but that they tend to exist in all industries to some degree.
UFCW contended that although current independent contractors may be satisfied with their employment status, this will not necessarily hold for newly classified workers. The Department acknowledges that new independent contractors may differ from current independent contractors but lacks any data to show how their satisfaction levels would differ. Lacking such data, which commenters did not provide, the best predictor of job satisfaction for new independent contractors is job satisfaction among current independent contractors. Further, the Department notes, as explained above, that this rule will not directly reclassify any workers but rather provides clarity regarding the 233 He,
H. et al. 2019, supra note 131.
234 Coalition for Workforce Innovation 2020, supra note.

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current process for determining worker classification.
UFCW used a 2017 report from Prudential Research, specifically regarding gig workers, to dispute the Departments claim that independent contractors are more satisfied than employees. UFCW excerpted from the report that, on-demand independent contractors who work full-time hours are less satisfied with their current work situation than full-time employees 44
percent vs. 55 percent. 235 However, the commenter did not include all of the findings in the source it cited; the same Prudential study notes that for gig workers who also have other jobs, their job satisfaction rate is 86 percent.
Notably, UFCW focused on gig workers in its comment, but conflates such workers with the entire universe of independent contractors. The Department acknowledges that although there may be lower job satisfaction for some subsets of independent contractors, studies that consider all independent contractors generally find that independent contractors report similar or higher job satisfaction than employees. For example, CWI submitted a survey they conducted finding that 94
percent of independent workers are satisfied with their work arrangements.236
By clarifying that control and opportunity for profit or loss are the core economic reality factors, this final rule is likely to encourage the creation of independent contractor jobs that provide autonomy and entrepreneurial opportunities that many workers find satisfying. For the same reason, this final rule likely will diminish the incidence of independent contractor jobs that lack these widely desired characteristics. Thus, the Department expects this final rule to result in more independent contractor opportunities which bring with them autonomy and job satisfaction. The benefits of worker autonomy and satisfaction obviously are difficult or impossible to quantify, but they nonetheless merit consideration.
5. Income Smoothing Several commenters asserted that independent contracting plays a key role in smoothing income during recessions by providing an alternative source of income. Commenters cited to a JPMorgan Chase Institute study that makes this case.237 Other commenters 235 Prudential 236 Coalition
Research 2017, supra note.
for Workforce Innovation 2020,
supra note.
237 D. Farrell, F. Greig, and A. Hamoudi, The Online Platform Economy in 27 Metro Areas:

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