Posts

uber

Labor Department Proposes Rule To Grant Gig Workers Employee Status

/in , /by

On Tuesday, the Labor Department revealed a new proposal that would make it harder for companies to classify workers as independent contractors rather than employees. This rule would impact the on-demand economy, which includes companies like Uber and Lyft.

Workers granted employee status qualify for benefits and protections like paid leave, minimum wage and overtime pay. Employers would also have to contribute to a portion of worker Social Security taxes and unemployment insurance.

Labor Secretary Marty Walsh spoke about the significance of the proposed rule in a prepared statement.

“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers. Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages. The Department of Labor remains committed to addressing the issue of misclassification.”

Labor Unions have long urged the Biden administration to scrutinize industries that rely on contractors, including app-based ride services, food delivery services or freelance task platforms like Handy, which connects customers with house cleaners and other home-improvement specialists.

Fair labor advocates stress that gig economy workers face more barriers to unionizing and cannot take advantage of essential benefits afforded to workers classified as employees.

The Labor Department said this misclassification is rampant in several industries, including home care, janitorial services, delivery, trucking and construction services. The misclassification also makes it difficult for businesses to compete with those that misclassify workers as contractors by promoting wage theft.

Embed from Getty Images

The proposed rule is a test that determines whether a worker who is economically dependent on a company should have contractor or employee status. It takes into account factors such as the level of control workers have over how they do their jobs or how many new opportunities they have to increase their earnings by offering new services. Workers who have limited control over either are deemed employees. The rule also requires employers to consider if an employee’s work is an integral part of their business.

It is important to note that the rule is interpretive and does not have the legal force of a congressionally approved regulation. It also only applies to laws the Department of Labor enforces, such as the federal minimum wage. State agencies and other federal agencies like the IRS would still be able to use their own criteria for employment status.

However, employers and regulators will likely consider the proposed rule as guidance for deciding on how to classify workers. Judges will also likely look to the test as a guide.

Patricia Campos-Medina, executive director of the Worker Institute at Cornell University’s School of Industrial and Labor Relations, considers this new move from the Biden administration a big step.

“This is a long-awaited determination that will empower essential workers to assert their basic wage and hour, health and safety and compensation rights. All workers are entitled to these rights, but employers easily avoid them by making arbitrary decisions on independent contractor rules.”

Embed from Getty Images

The Biden administration’s rule would replace the Trump administration’s guidance on worker classification. The previous administration’s guidance made it easier for companies to misclassify workers as contractors. The new proposal will likely face opposition from businesses and organizations that supported the previous rule.

According to The Hill, Uber and Lyft stocks fell around 14% after the announcement. The new proposal could also increase labor costs for gig-based companies by about 30%.

CR Wooters, head of federal affairs at Uber, claimed this does not imply an inevitable negative outcome for the company.

“Today’s proposed rule takes a measured approach, essentially returning us to the Obama era, during which our industry grew exponentially.”

Uber Lyft

California Votes To Exempt Uber And Lyft From Gig-Work Law 

/in , /by

To the dismay of contract drivers throughout California, a ballot measure was passed that exempts ride-sharing companies, like Uber and Lyft, from treating their drivers as actual employees. For tech companies, this vote is a major win in terms of protecting their business models, but for gig-workers, it means being paid the bare minimum without any of the benefits. 

The ballot measure was referred to as Prop 22 and was authored by Uber, Lyft, Doordash, and Instacart. The measure claimed that the companies would be exempt from AB5, a landmark California labor law that appeared years of constant complaints from driver-organizations who wanted to be treated as actual employees. 

Under Prop 22, the drivers for these companies will continue to be classified as contractors, or gig-workers, which removes them from having access to rights like minimum wage, unemployment benefits, health insurance, collective bargaining, union work, etc. Essentially, it means that the gig companies have full control over its employees earnings and rights.

Embed from Getty Images

The fact that America is in the middle of one of the worst economic crisis’ in history as a result of one of the most deadliest pandemics the world has ever seen, has a ton of workers throughout the nation fighting for their right to live, and not work in the middle of a global health crisis. Especially considering how much money companies like Uber earn in a given year, billions, gig workers are fighting for a chance to be given even the most basic of worker rights. 

The companies made their argument by claiming that enforcing AB5 would cause “irreparable harm to their business model.” The “harm” that the companies are referring to would be actually paying their employees a regular salary and providing riders with more low-cost rides, which would thus increase business as well. 

The corporations involved in Prop 22 spent over $800 million on the campaign, leading to a slew of online commentary regarding the irony of multi-billion dollar companies not wanting to pay their employees minimum wage so badly that they spend hundreds of millions on a campaign against it. This spending, however, is what led to their win, according to Steve Smith, a spokesman for the California Labor Federation. 

Embed from Getty Images

“Despite all our efforts, at the end of the day our messaging was drowned out by the campaign’s massive spending. They have extraordinary resources that they’ve indicated that they’re willing to utilize in other states outside of California, which is a huge concern.”

Labor advocates throughout the nation are worried that California is setting a dangerous precedent for gig workers across the nation. Especially considering we’re in the middle of a pandemic where many individuals are picking up gig work to help their households financially, the fact that these corporations are trying to drain even more money from their lower class employees is dumbfounding. 

New York Governor Andrew Cuomo recently spoke on this issue, stating that he wanted to introduce legislation that would make sure all workers in the state have necessary protections and benefits. “Many of the gig economy workers are excluded from the progress New York has enacted because the law has not caught up with changes in the economy. Corporations avoid fair pay and benefits, increasing their profits at the expense of the employee and the taxpayer.” 

Beyond that, current president-elect Joe Biden and vice-president-elect Kamala Harris both publicly opposed Prop 22 during their campaigning, and promised to create a federal version of California’s AB5 law that would aim to protect gig workers everywhere so they’re given the same opportunities and benefits as any other employee in America. 

DoorDash

Food Delivery Workers Fear For Their Safety Battling Curfews And A Pandemic

/in , /by

For the past few months, delivery/gig workers have had to navigate being an “essential worker,” making minimum wage, and battling a global pandemic while going out and working during a time where the government is telling everyone to stay home. Now, many are facing the challenges of figuring out how to work around thousands of protests and early night curfews enforced aggressively by the nation’s police force. 

This past Thursday, a video went viral on Twitter that showed a food courier out doing deliveries being arrested by multiple NYPD officers for being out past curfew, even though essential workers have been exempt from the curfew restrictions. The employee worked for a food delivery service known as Caviar, which is owned by DoorDash, and a spokesperson for the company recently made a statement regarding the video, claiming that they were “alarmed by it and we’re gathering information and are in contact with City officials to determine what transpired.” New York City Mayor Bill de Blasio tweeted that the incident is “NOT acceptable and must stop.”

Embed from Getty Images

This wasn’t an isolated incident either, several other videos have been circulating online that seem to depict multiple delivery workers being arrested, assaulted, and yelled at by officers for simply doing their job or walking home from work; something that’s especially common in large metropolitans like New York City. 

In multiple media interviews with these employees, many have reconsidered their current employment during a time of justified civil unrest, however, for many this is their sole source of income, and quitting a job during one of the worst recessions the US has ever endured is daunting, especially if you’re making minimum wage. 

DoorDash has responded to their employees having to navigate through crowded city streets, police officers, and working with small businesses that have closed on days due to protests, but are listed as open on the app, by incentivizing them with $1-$4 bonuses on certain orders; I’m sure you could imagine how less than enthused some employees were. 

“I think it’s crazy, with everything on fire and giving me a $2 bonus — it’s because they know people have to work. I lost my previous job earlier this year and turned to delivery services like DoorDash as a financial lifeline. Since I didn’t know the pandemic was going to hit, I didn’t have much money saved,” an anonymous DoorDash employee told the media. 

Embed from Getty Images

DoorDash has also released a statement in which they claimed that their employees’ health and safety was top priority, and that they are “tailoring operations based on the guidance [they] have received from governments.” Other popular food delivery services like GrubHub and Postmates have issued similar statements. 

The unemployment rate in America is currently at 13.3%, and over 30 million individuals have lost their jobs since the beginning of the coronavirus pandemic. Workers for essential services like DoorDash are now at a crossroads of choosing their health and safety or minimum wage employment during a time of political unrest and economic turmoil. Many are forced into choosing the latter. 

“For those who are making ends meet by delivering food and groceries during the pandemic, this is going to be another source of anxiety, insecurity, and economic instability. Gig workers are disproportionately people of color, many of whom have already experienced police harassment,” Veena Dubal, a labor law professor at the University of California Hastings College of the Law, said about the curfews. 

The curfews themselves aren’t only harmful for employees in terms of potentially being arrested, but also because it limits the amount of business these essential services are able to receive, which leads to even less money being made. New York has since lifted its curfew, but other major cities still have them in place, so many protesters are now calling on their lawmakers to allow them to express their first amendment rights the way they were originally intended; at any hour of the day or night.