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Independent contractors bill creates confusion in “gig” economy – News – Burlington County Times

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The powerful South Jersey Democrat spoke about the bill on Thursday during a Senate Labor Committee hearing packed with freelance workers, labor leaders and business advocates. He told the lawmakers and crowd that the bill has been amended and now seeks to codify existing state labor regulations surrounding so-called independent contractors.

TRENTON — Senate President Stephen Sweeney tried to dampen some of the controversy surrounding legislation to crackdown on employers who intentionally misclassify their workers as independent contractors.

The powerful South Jersey Democrat spoke about the bill Thursday during a Senate Labor Committee hearing packed with freelance workers, labor leaders and business advocates. He told lawmakers and the crowd the bill has been amended and now seeks to codify existing state labor regulations surrounding so-called independent contractors.

An earlier version of the bill sparked widespread criticism and alarm from scores of workers and business groups, including freelance journalists, public relations and social media consultants, Uber and Lyft drivers, commercial truck drivers and nonprofit groups who feared the bill would make it impossible for companies to hire them as independent contractors.

Sweeney, D-3 of West Deptford, stressed that the bill would not change the existing regulations governing their status as freelancers but would codify those measures into law.

“It’s a pro-worker bill that simply codifies into law existing regulations that are already in place to protect workers from misclassifications. Nothing new or different from what the administration does now,” Sweeney said during the hearing. “A workers status as an independent contractor employee will not change as a result of this bill. The bill will continue to ensure the ability of legitimate independent contractors to continue to pursue their work at the same time it safeguards against misclassification.”

By misclassifying workers as independent contractors, businesses don’t have to provide them the same benefits as employees and also don’t have to contribute payroll taxes to the state for unemployment insurance and other protections. It’s been described as a growing problem in New Jersey and across the nation as the so-called “gig” economy flourishes.

The issue received widespread attention last month when Bloomberg reported that New Jersey was seeking $650 million in disability and unemployment insurance payments from ride-sharing giant, Uber, arguing that its drivers should be classified as employees rather than independent contractors.

A New Jersey Department of Labor audit last year found that at least 12,315 workers were misclassified, costing the state more than $13.9 million in tax payments. The audit looked at just 1% of registered employers.

“Misclassification not only hurts workers, it hurts law-abiding businesses and the state,” Sweeney said. “The businesses that don’t play by the rules aren’t paying into the unemployment fund or the disability fund, which raises costs for all other businesses. It shortchanges everyone else.”

Sweeney’s words did little to soothe the fears of scores of workers who attended the hearing, including several freelance writers, who said they were already losing work because of the threat the legislation could become law.

“We are already being blacklisted on the threat of this legislation passing,” said Kim Kavin, a freelance writer from Morris County. She said a magazine paid her $2,000 an article last year but will no longer hire her.

“You just took $2,000 an article out of my income,” she said. “This is an assault on independent contractors like us.”

All sides seem to agree that distinguishing between employees and independent contractors has become increasingly challenging.

The state regulations Sweeney referred to are known as the ABC test and gauges whether a worker is independent based on whether they are under control of their own hours and work schedule and whether they are performing work outside the employer’s usual course of business, premises or typical place of business. The third part of the test asks whether the worker is part of an independent “trade, occupation, profession or business.”

The second part of the test has garnered much of the controversy since the original version altered the definition to make clear that workers who do the work outside a company’s place of business could still be classified as employees. But one of the amendments to the bill changed the language to mirror the existing regulation.

That appeared to satisfy a representative from Rev.com, a transcription service that had suspended hiring New Jersey freelancers because of the legislation. The representative said the company still hoped for some more changes to the legislation but that the amendments laid out Thursday would be enough to lift the suspension.

Eric Richard, legislative affairs director for the New Jersey AFL-CIO, also testified in support of the measure, arguing that it was a better bill than a recent California law that opponents said has created chaos among the freelance industry there.

“I know a lot of folks think this will do away with independent contractors. It couldn’t be further from the truth,” he said. “What it does do is change business as usual … If a business or corporation is misclassifying employees that should change.”

Mike Egenton, executive vice president of government relations for the New Jersey Chamber of Commerce, said the changes to the bill seemed to be improvements but that confusion was still rampant.

“Everything is in the eye of the beholder,” he said.

The bill was advanced from the committee by a 3-1 vote, which followed over four hours of testimony.

It was the second time the Senate committee had considered the legislation. The labor panel also voted to advance it on Nov. 14, just a week after the bill was first introduced. Sweeney and Labor Committee chair Fred Madden agreed to return it to the committee for a second hearing and vote due to the controversy and amendments.

A companion bill in the Assembly was also advanced from that chamber’s Labor Committee last month and Sweeney said the changes made to the measure on Thursday make it identical with the Assembly bill.

Both the full Assembly and Senate must still vote to approve the measure in order to send it to Murphy to consider. The governor has not publicly weighed in on the bill, but his administration has been outspoken about the need to combat employee misclassification.

Murphy convened a task force to study the issue last year that suggested fines for misclassification be increased among other recommendations.

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Collaboration in the Gig Economy

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September 18, 2020

Utmost Software Inc. was the judges’ pick among four workforce ecosystem technology startups presenting in a competition styled after the television show Shark Tank on Thursday. The event was part of the Collaboration in the Gig Economy virtual conference bringing together staffing firms, buyers and HR tech.

All four finalists were chosen from a number of firms to present before a panel of four judges, who picked their top startup.

Utmost provides software that enables enterprise firms to track their extended workforces, which include contingent workers, consultants, contractors and freelancers, among others. Unlike VMS providers, which are typically supplier-paid, the company has a set pricing model that is paid by enterprise firms themselves.

Utmost is also native to Workday and focuses exclusively on Workday customers. In addition, Workday is an investor in the company and Utmost co-founder and COO Dan Beck himself comes from Workday.

That relationship was one thing that caught judges’ attention.

“I like the business, it’s got a built-in customer base,” said Jai Shekhawat, one of the Shark judges. Shekhawat is also founder and former CEO of SAP Fieldglass. However, he did question why Utmost chose its pricing model when enterprise firms are more accustomed to the VMS supplier-paid model.

“I think he has a bright future ahead of him; not easy, but I wish him all the best,” Shekhawat said.

Timing, thoughtfulness and focus were also cited by the other three judges:

  • “Although there was something timely in everything we saw today, Utmost, in particular, I think is really timely to what enterprise customers, HR executives, hiring managers are trying to solve right now,” said Rebecca Henderson, CEO and executive board member at Randstad nv.
  • “All of the startups were really interesting,” said Pete Flint, managing partner of NFX, a venture capital firm. “Utmost stood out, just their thoughtfulness, their experience, their distribution; I think that really stood out. This is a terrific opportunity; it’s a burning need for many enterprises.”
  • “The criteria of innovation, market opportunity and the quality of the presentations made it really tough because some may be more innovative than others and some might have a bigger market opportunity,” said Gary Swart, partner at Polaris Partners, an investment firm. “I think Dan’s focus was a differentiator. The fact that there is not only an innovative solution but a focused go-to-market, not trying to boil the ocean and tackle too much.”

The other finalists presenting to the Shark Tank panel were:

  • Emma El-Karout, founder and CEO of One Circle, a digital community of on-demand HR freelancers.
  • Matthew Mottola, co-founder and CEO of Venture L. The company is described as a Shopify for running freelance businesses that enables freelancers to scale their operations.
  • Alexander Torrenegra, CEO of Torre, a professional network that is friendly for both knowledge workers and blue-collar workers that uses programmatic automatic matching for jobs.

The Collaboration in the Gig Economy Conference ends today.

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Despite economic slowdown, Pakistan’s gig economy continues to shine – Business Recorder

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Gig economy saves Australia’s jobs market, but at what cost?

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Don’t be surprised if employers use the recession to employ more casuals and outsource more work.

(Image: Adobe)

There were three messages in the confusing jobs data for August that emerged yesterday from the Australian Bureau of Statistics. The headline number was dramatically better than any economist, or even the Reserve Bank or Treasury, had predicted.

The first is, despite the claims from the media and the Morrison government that the Andrews government’s lockdown was some profound act of economic vandalism, Victoria’s jobless rate only moved up to 7.1% from 6.8%, with 42,000 jobs lost in that state last month. Hours fell by 4.8% in Victoria, compared with a 1.8% rise across the rest of Australia.

Now there may well be another big fall in Victoria in the September data as the numbers catch up. There will be a clue in the ABS’s next payroll jobs and wages data next week.



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