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Uber sues California over the gig-worker law. Now what? – Lake County Record-Bee

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A new law that takes effect this year is facing a lawsuit from a couple of the very workers it’s trying to protect — ride-hailing and delivery drivers — as well as the companies for which they work, Uber and Postmates.

AB 5 codifies a state Supreme Court ruling, which last year adopted a simpler test for determining when a worker must be classified an employee and therefore entitled to a minimum wage and benefits. The test, which the UC Berkeley Labor Center estimates could apply to 64 percent of workers who are independent contractors in California, could upend the business models of Uber, Postmates and other companies that rely on contractors.

“App-based independent service providers and the companies that operate the platforms they use have a constitutional right to pursue the occupation of their choice — not to be forced to be employees when they are independent, or to be forced to be taxi or delivery companies when they are technology companies,” the lawsuit states.

The lawsuit, filed late Monday, is just one way Uber and Postmates are trying to fight AB 5. The two companies, along with Lyft, Instacart and DoorDash, have also put more than $100 million into a campaign to try to bring the issue before California voters in November 2020.

Postmates said it only wants to find a solution.

“This lawsuit is an effort to preserve on-demand work opportunities while urging lawmakers, organized labor, and Governor Newsom to return to the table,” said a spokeswoman for the San Francisco company, which delivers food, drinks and groceries, on Tuesday.

“We do not negotiate on basic labor protections for working people in California because unscrupulous employers file lawsuits that have no ground,” said Assemblywoman Lorena Gonzalez, D-San Diego, and author of AB 5, in an email to this publication Tuesday.

An Uber spokesman said the company would have no comment beyond the lawsuit.

Co-plaintiff Lydia Olson drives for Uber in Sacramento and the Bay Area to supplement her income from her consulting firm, according to the lawsuit. The other plaintiff is Miguel Perez, a former FedEx driver who now makes deliveries for Postmates in the Los Angeles area. In the lawsuit, both expressed a desire to remain independent contractors because of the schedule flexibility it provides them.

Gonzalez said individual workers don’t get to “opt out” of labor laws that are designed to protect workers, employers and the state, adding that “doing so would hurt all workers and establish a race to the bottom.”

Some Bay Area ride-hailing drivers interviewed by this publication say they make as little as $9 an hour and sleep in their cars.

Experts expressed doubts the lawsuit would succeed, especially based on its arguments that AB 5 targets app-based employers and violates the equal-protection clauses of the state and federal Constitutions.

“The Constitution has been interpreted for decades (since the 1930s) to permit economic regulation of exactly this type without running afoul of the equal protection clause,” said Beth Ross, a Bay Area labor and employment attorney, on Tuesday. “It’s inconceivable that any court would validate this argument.”

William Gould, professor emeritus at Stanford Law School and a former chairman of the National Labor Relations Board, agreed.

“The conduct of these plaintiffs was a central concern of the Legislature because of substandard wages and conditions and diminished payments to the public treasury,” Gould said Tuesday. “There is nothing arbitrary or unreasonable about their inclusion.”

Workers in other industries, including truck drivers and freelance journalists, are being affected by AB 5. Both groups also have filed lawsuits.

J. Ross Parrelli, of Auburn, is an independent musician. Like other entertainers who don’t have an exemption under AB 5, she’s confused about what it means for her. “If I want to book a tour, I have to put music together. Do I have to employ a guitarist, producer and engineer?”

But Uber and other gig-economy players sparked the law.

“There is a very strong case to be made that Uber and Lyft drivers should have been classified as employees under the earlier test and that (the companies) have been operating in violation all along,” said Ken Jacobs, chair of the UC Berkeley Labor Center, on Tuesday. “The law finally caught up with them.”

Jacobs said the question is now enforcement. AB 5 has a provision allowing large cities to sue companies that fail to comply. And the office of California Attorney General Xavier Becerra, who was named as a defendant, said it would review the complaint.

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Egypt wants to register millions of gig workers for state insurance, aid

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CAIRO: Egypt will start registering millions of gig workers in order to offer them health insurance and emergency state aid during the coronavirus pandemic, which has taken a particularly heavy toll on the nation’s ad-hoc employees, officials said.

There are at least 14 million gig workers in Egypt, and while some workers and campaigners welcomed the government’s drive, others warned that many workers could be reluctant to sign up – fearing tax and social security payment demands.

The government said it plans to identify and support two million gig workers in the country of 100 million people by the end of this year, labour ministry spokesman Haitham Saad El-Din said on Saturday.

“It is part of a government plan to give assistance to this segment of the society which has been majorly affected by the pandemic,” he said, adding that officials were focusing first on identifying casual construction labourers.

Gig workers who have their employment status registered on their national identity cards under a new “irregular employment” category will be given free social security insurance and be eligible for state welfare programmes.

Egypt’s state-run insurance plan includes life insurance and disability cover, as well as covering healthcare costs.

The announcement is the latest in a series of government measures aimed at shielding vulnerable groups from the economic fallout of the pandemic.

Soon after the coronavirus outbreak began, it launched a programme that supports irregular workers with monthly aid, and Egyptian President Abdel Fattah el-Sisi called for financial support to be boosted when a second virus wave took hold.

State welfare spending surged 36% in the first half of the current fiscal year, Finance Minister Mohamed Maait said recently.

On the books

Some daily labourers hailed the registration drive as a positive step, saying it would help bring them into the formal economy and recognise their economic contribution.

“Millions of Egyptians have been affected by this pandemic but it’s really good that the government is not leaving us behind,” said Farouk Mahmoud, 35, a temporary worker from the city of Sohag.

Still, while the latest data puts the number of gig workers at 14 million, the real number may be much higher – making registering them a daunting administrative task, said Bassant Fahmi, a member of parliament’s economic affairs committee.

Some workers may also be wary about being on the books.

“Many of them may fear being asked afterwards to pay taxes or insurance. That could mean a lot of gig workers avoiding being identified by the government,” she told the Thomson Reuters Foundation.

But besides any misgivings about being under the government’s radar, many gig workers in Egypt are more concerned about the dearth of permanent job opportunities – especially for young people – and the health of the wider economy.

“It isn’t crucial for me to have a job on my ID,” said Abanoub Lotfi, a 26-year-old driver for ride-hailing service Uber, who has a degree in commerce.

“What really matters is that the government offers me a stable job that suits my academic background and helps me afford my needs and those of my family.” – Thomson Reuters Foundation



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Self-employed, gig workers still waiting on PPP rules for bigger loans

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Virojt Changyencham | Moment | Getty Images

The self-employed and gig workers are anxiously waiting for the Small Business Association to update guidelines to its Paycheck Protection Program, which could mean bigger loans for the group.

The Biden administration announced last week changes to how the SBA will calculate forgivable loans for sole proprietors and other small businesses without any employees. The updated formula — which will likely lead to larger loan amounts for non-employer firms, including sole proprietors and independent contractors — will be announced this week.

It’s still unclear when in the week the SBA will update its guidelines, meaning that those who would benefit from the change should still wait to submit their applications for the program.

More from Invest in You:
Smallest businesses getting extra PPP help. What to know before applying
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“Loans submitted prior to the official rule changes are subject to the rules in effect at the time of application,” said Carol Wilkerson, an SBA spokesperson.

That’s led to frustration for some who want to take advantage of the two-week priority application window for the smallest businesses that went into effect on Feb. 24 and ends the second week of March. Of course, sole proprietors will still be able to apply for PPP loans until the program deadline at the end of the month; they just won’t get priority treatment once the 14-day exclusivity window closes.

For now, lenders are working to help borrowers prepare what they can to be ready for the updated guidelines.

“We’ve always taken the approach of, ‘Hey, we don’t have all the answers, but let’s proceed as far as we can without the answers,'” said Ed Barry, CEO of Capital Bank, based in Rockville, Maryland.

Barry added that the bank is also working to build awareness among small businesses that may not realize that they’re now eligible for a PPP loan.

What is known about the formula change so far

For firms with employees, maximum PPP loans are 2.5 times average monthly payroll costs, per the SBA. As a stand-in for payroll costs for solo workers, the SBA used net profit information from tax returns, even though payroll and profit are different measures.

In addition, the net profit line includes deductions, which reduced or eliminated profit numbers for some, yielding small loans or making them ineligible for the program.

The updated formula will instead use gross income as a stand-in for payroll costs, a larger number than net income, meaning many firms will get more money in forgivable loans.

Loans submitted prior to the official rule changes are subject to the rules in effect at the time of application.

Carol Wilkerson

SBA spokesperson

“It’s a tremendous change,” said Keith Hall, president and CEO of the National Association for the Self-Employed.

The change is important, as sole proprietorships are the most common business structure in the U.S. The IRS says there are some 41 million self-employed people in the country and, in 2018, more than 27 million had filed a return with an IRS 1040 Schedule C form for sole proprietors, according the agency.

Many of these businesses have been particularly hard hit by the coronavirus pandemic. About 70% of such firms with no employees are owned by women and people of color, and 95% of Black-owned and 91% of Latino-owned firms are sole proprietorships, according to SBA data.

But so far, very little forgivable funding from the SBA has gone to sole proprietorships — according to a recent survey from NASE, nearly two-thirds of its members said they didn’t get any money from the program.

Much of that was due to confusion in the early days of the program around eligibility and forgiveness, which are hopefully clearer today, Hall said.

“Many of the reasons that those small-business owners did not either apply or get approved for a PPP loan — I think many of those barriers have been removed,” he said.

Questions remain

To be sure, other changes to the PPP program that the Biden administration announced last week do go into effect today, March 1 — some student loan borrowers, legal non-residents and those with certain criminal records are now eligible to apply for forgivable loans.

Still, there are further questions for sole proprietors around the timing of applications, especially for those who already got a loan approved but would get more under the new formula. So far, there isn’t a process for amending a dispersed loan, or holding back an application that’s currently pending.

“All unknowns right now,” said Alex Cohen, CEO of Liberty SBF.

If you’re a small business with a story to share about PPP, email Carmen Reinicke at carmen.reinicke@nbcuni.com

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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Dream realised in compelling live gig

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MATT KEEGAN
Mary’s Underground, February 28

★★★★

In another bid to reach beyond the musical horizon, Matt Keegan composed Vienna Dreaming as a tribute to his great grandfather, Heini Portnoj, an Austrian Jew forced to abandon his musical career in Vienna to escape the rising tide of Nazism. Three years after releasing a recording of the suite, Keegan finally presented this ambitious music in concert.

Matt Keegan and Veronique Serret. Shane Rozario

Matt Keegan and Veronique Serret. Shane RozarioCredit:Shane Rozario

Its strength lies not only in the imagination brought to bear, but in Keegan’s empathy for his subject, his intent being to slide inside the mind of his great grandfather, both as events unfolded in 1930s and in the aftermath, with Portnoj looking back after settling in Australia.

The concert’s instrumentation and personnel differed from the album, with only Keegan (clarinet, saxophone) and drummer Miles Thomas being shared. The album’s cello now became Veronique Serret’s violin and the double bass became Brendan Clark’s electric bass, with Ben Hauptmann (electric guitar) and Freyja Garbett (keyboards) completing the cast. These changes were much more than cosmetic, with the improvisational aspect of the work expanded, allowing for some startling individual contributions, most notably from Serret.

As consistently strong as the suite was, the opening Vienna Overture was especially compelling, with the main waltz-time theme materialising from skimming fragments of sound, dissolving back into those fragments and reassembling itself yet again – an evocation of an elderly Portnoj musing on an impossibly different time and place, long, long ago.

As with the album, the sound was carefully calibrated to shift between the familiar – the bruising intensity of Keegan’s baritone saxophone, for instance – and an extreme use of electronic treatments, including occasionally radical reverb and delay on the drums, amplifying the work’s prevailing oneiric quality and intentionally blurring clarity of outline. Ghosts of Johann Strauss, Frank Zappa and Miles Davis all seemed to materialise and dematerialise at various points, but without any sense of appropriation.

Providing an instantly engaging opening set was Yulugi, with Gumaroy Newman’s arresting voice and yidaki leading us deep into his ancestral culture, in dialogue with Keyna Wilkins’ piano and luminous flutes.

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