Connect with us

Companies

Is This The Start Of A War Against Gig-Economy Companies?

Published

on

New Jersey’s Department of Labor and Workforce Development has hit Uber with a massive $650 million bill. The state contends that the ride-hailing company misclassified its drivers as independent contractors, instead of employees.  

The Labor Department asserts that Uber financially benefited by its misplaced characterization of its drivers and now demands that the company pay its fair share of unpaid employment taxes. The monies owed are broken down by $523 million in overdue taxes and $119 million in interest and penalties since 2015. Uber officials, however, dispute these findings. “We are challenging this preliminary but incorrect determination,” Uber spokeswoman Alix Anfang told Bloomberg Law.  

The rapid emergence of the gig-economy and related job market has substantially altered the way people work. Individuals who need extra money, can’t seem to find a full-time, permanent role or desire a flexible independent lifestyle have taken on these new types of jobs—they act and look like employees, but are treated as independent contractors by the companies they work for. Usually, there is a tech company at the center and the workers carry out the tasks. Companies such as Uber, Lyft, Postmates, Instacart, DoorDash, Grubhub, TaskRabbit, Upworks and Fiverr exemplify this trend. 

There is an enormous financial incentive for corporations to classify workers as contractors. They don’t have to pay payroll taxes, such as FICA (Social Security and Medicare), disability, federal and state-level unemployment, health insurance benefits or offer paid sick, personal and vacation days. Employees also have to contribute to pay some of these taxes as well.   

As of now, New Jersey’s demands are limited to unemployment and disability insurance, but it could require Uber to provide back pay to drivers for minimum wages and overtime under state law. The numbers could be staggering! If New Jersey alone seeks $650 million from Uber, consider the vast amount of money at stake when you add in all of the other states, along with the other companies built upon gig workers. Uber’s driver costs could spiral higher by more than 20% if they are forced to reclassify workers as employees, according to Bloomberg Intelligence. The stock market negatively reacted to New Jersey’s claims, as the share price of Uber initially declined about 3.9%. Uber’s rideshare rival, Lyft, saw a drop of 3.2% in its stock price.  

California previously passed a law in September that could force Uber and other similar companies to reclassify their drivers as employees. Other states, such as New York, Oregon and Washington are considering legislation too. They may have realized all of the tax revenue they’re losing out on.

Since this will severely financially harm Uber, Lyft and other tech companies, they are fighting back against the California law with a $90 million war chest to back a ballot initiative to stop the new law or gain an exemption.   

New Jersey Labor Commissioner Robert Asaro-Angelo said, “Cracking down on employee misclassification” is a ‘priority’ for Governor Phil Murphy’s administration.” Asaro-Angelo says in regards to Uber’s business model, “This defiance of the law puts honest business owners at an unfair disadvantage.”  

While it may seem innocuous at first sight, worker classification is financially important. When corporations—like Uber—don’t pay their fair share of taxes, taxpayers (like you and me) have to bear the burden. Competing businesses are put at a disadvantage because they are forced to pay all of the appropriate taxes, which add an additional 20% to their cost structure. 

In a lightly regulated environment under President Donald Trump’s administration, gig employers present themselves as innocent platform providers that only connect drivers or service providers to customers. Regulators haven’t really fought back against this tactic.  

Reclassifying workers as employees is an existential threat to the viability of Uber and similar organizations. Uber, and many other tech companies in this space, are still hemorrhaging money and desperately trying to reach profitability. With the extra costs attended with the pay and benefits associated with contractors becoming employees, questions arise as to how the companies can survive. 

The dirty little secret of Uber and similarly situated companies is that they’ve built their hopes on the backs of contractors and skirting the tax loopholes. If other states follow New Jersey’s lead, the companies may be in serious jeopardy. If the worst happens, the companies go bankrupt and the contractors will lose their gigs. There must be a delicate middle-ground solution to ensure fairness (with respect to contractors and paying taxes), while not financially ruining the companies involved.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Companies

Western Canada’s Gig Leader Launches 1.5 Gig Internet Speeds for Business Customers

Published

on

By

Shaw Business’ new 1.5 Gig speed tier is ideal for businesses looking to keep multiple business-critical devices and applications connected and running as fast and efficiently as possible

CALGARY, Alberta, Feb. 25, 2021 (GLOBE NEWSWIRE) — Shaw Business today announced the launch of a new 1.5 gigabit-per-second (Gbps) speed tier designed to give businesses of all sizes the speeds and bandwidth to leverage the data-heavy applications and cloud services they need to manage and grow their operations.

Beginning today, new and existing customers can leverage the power of Shaw’s Fibre+ Network to access download speeds up to 1.5 Gbps through one of two plans — SmartWiFi Gig 1.5, which pairs these speeds with Shaw Business’ enterprise-grade WiFi solution, or as a standalone plan with Business Internet Gig 1.5.

The new 1.5 Gig speed tier is ideal for organizations that rely on multiple connected devices to perform day-to-day actions, from multiple employee laptops to high-bandwidth HD video calls. The download speeds offered by SmartWiFi Gig 1.5 and Business Internet Gig 1.5 are also perfect for companies who frequently store, share, and back-up company information using cloud computing services.

“Over the past year, businesses have increased their demand for access to fast and reliable internet connections. Today, as many organizations start planning for a future that balances employees working from home with a return to physical offices, we know their need for faster speeds and more bandwidth will be greater than ever before,” said Katherine Emberly, President, Business, Shaw Communications.

“As Western Canada’s leader in Gig speed internet, SmartWiFi Gig 1.5 and Business Internet Gig 1.5 gives customers the connectivity backbone they need to succeed. With download speeds up to 1.5 gigabit-per-second from Shaw Business, business owners can rest assured their network has the capacity to handle the demands of today, and well into the future.”

Using Shaw’s existing Fibre+ Network, the new 1.5 Gig internet speed tier is a highly accessible and affordable solution which doesn’t require the hassle of digging up streets and drilling holes in the wall to get connected. Shaw is the Western Canadian leader in Gig-speed internet, with service available to more than one million more businesses and homes than TELUS.

The introduction of 1.5 Gig speed for businesses comes on the heels of Shaw Communications making Fibre+ Gig 1.5 available to residential customers. Both speed increases are the result of significant investments to build, upgrade and expand its Fibre+ and Fast LTE networks and services — more than $32 billion over the past eight years.

SmartWiFi can be bundled with SmartSecurity and SmartSurveillance — Shaw Business’ managed network security and surveillance solutions — which can all be easily maintained through one integrated dashboard. Customers can also bundle SmartWiFi with SmartTarget, an enterprise-grade customer relationship management system to help businesses understand customer behaviours and drive sales from a single automated platform.

For more information on SmartWiFi Gig 1.5 and Business Internet Gig 1.5 plans from Shaw Business, please visit business.shaw.ca.

About Shaw
Shaw Communications Inc. is a leading Canadian connectivity company. The Wireline division consists of Consumer and Business services. Consumer serves residential customers with broadband Internet, Shaw Go WiFi, video and digital phone. Business provides business customers with Internet, data, WiFi, digital phone and video services. The Wireless division provides wireless voice and LTE data services through an expanding and improving mobile wireless network infrastructure.

Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX – SJR.B, SJR.PR.A, SJR.PR.B, NYSE – SJR, and TSXV – SJR.A). For more information, please visit www.shaw.ca

For media inquiries, please contact:
Shaw Communications Inc.
Chethan Lakshman, VP, External Affairs
(403) 930-8448
chethan.lakshman@sjrb.ca

Source link

Continue Reading

Companies

UK Supreme Court’s Uber decision is a victory for all gig workers | Business and Economy News

Published

on

By

For the past few years, the “gig economy” business model – in which workers are classified as independent contractors and therefore not given basic employment rights – has been on trial across the world.

From Uruguay and the United States to Australia and France, couriers and drivers have been bringing legal challenges against food delivery and passenger transport companies, such as Uber, Lyft, and Deliveroo, arguing that as their “workers” or “employees” they should be entitled to employment protections such as minimum wage, paid holidays and the right to unionise.

The United Kingdom has been one of the main battlegrounds for such cases and things have not gone well for the companies: they have lost virtually every high-profile workers’ rights case that has been brought against them.

And last week, they lost again. In a landmark decision published on February 19, the UK Supreme Court ruled that Uber drivers belong to the legal category of “limb (b) workers”, which entitles them to employment rights.

The court reasoned that “the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber… [It] is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill.”

For anyone who has taken an Uber before, this assessment is no shocker. The decision is also not surprising as Uber had already lost three times in a row before the case reached the Supreme Court. Nevertheless, this decision still has dramatic implications for workers.

“Gig economy” companies often make the people who work for them sign highly sophisticated contracts that are designed to make it look like they are independent entrepreneurs rather than the companies’ employees. When the issue goes to court, the companies rely on these contracts to argue their case. These contracts are key to the functioning of the “gig economy” because they are the main mechanism through which the companies try to disguise the otherwise blindingly obvious fact that they are hiring workers and telling them how to do their jobs but refusing to give them basic employment rights and protections.

The Supreme Court addressed this issue in its latest decision against Uber head-on. In particular, it held that courts and tribunals should not treat these contracts as the starting point of their analysis, because “an employer is often in a position to dictate such contract terms” and “the individual performing the work has little or no ability to influence those terms”.

The effect of the Uber decision is that it will now be even harder for employers to use their contracts to misclassify their workers and deprive them of basic rights. This means that any attempt by Uber to squirm out of the decision by changing the contracts – as the company has already hinted at – will be all but hopeless in the courts.

With last week’s decision against Uber, the Supreme Court also underlined its commitment to ensuring that the laws passed by Parliament – in this case laws that aim to protect vulnerable workers from exploitative employers – are being fully implemented.

The UK Supreme Court has been bolstering the role of Parliament for a while now.

In 2017, the court held that despite the Brexit referendum vote, then-Prime Minister Theresa May could not take the UK out of the European Union without an act of Parliament. Later that year, the court struck down a regime of employment tribunal fees, noting that if people do not have unimpeded access to the courts to demand the enforcement of the laws passed by Parliament, “the democratic election of Members of Parliament may become a meaningless charade”.

And in 2019, after Prime Minister Boris Johnson attempted to shut down Parliament for several weeks, the Supreme Court ruled the decision unlawful. Indeed, it is a hypocritical peculiarity of British politics in recent years that despite a Brexit campaign fought by some – ostensibly – to protect the sovereign role of Parliament, it is the Supreme Court, rather than the Brexiteer government in power, that has become the institution’s staunchest defender.

With its latest decision against Uber, the Supreme Court sent the message to all UK workers that it would not allow gig economy companies to trample employment rights and protections that have been enshrined in law by their elected representatives.

The impact of the decision is likely to be felt beyond Britain’s shores as well.

For example, some of the worker’s rights the Supreme Court considered in last week’s decision come from European Union (EU) law. In EU law, various employment rights, such as paid holidays, equal pay for men and women, and protection from discrimination, apply to “workers”, a legal category with the same definition in the bloc’s 27 member states. So, the fact that Uber drivers were held to be “workers” in the UK would likely be persuasive for courts across the EU considering whether the company’s drivers are entitled to the same rights there.

Beyond Europe, from India to the US, the decision has been hailed as a symbolic precedent for regulators and courts.

Although employment laws differ between countries, Uber’s defence in workers’ rights cases is usually the same: it claims to be a technology, rather than transportation, company, acting as an intermediary between drivers and passengers. The fact that a panel of six justices of the UK’s highest court has unanimously rejected this absurd assertion is likely to be persuasive for courts around the world grappling with the same issue.

In the US, there are multiple definitions of “employee” across state and federal laws. However, the courts often consider the control a company exerts over a worker as a key factor when deciding whether that worker is entitled to employment rights or not. So, the UK Supreme Court’s extensive discussion of how Uber controls its drivers will likely be helpful to drivers arguing their cases across the pond.

In Australia, Uber has successfully defended itself against several legal challenges concerning workers’ rights (although it recently settled the most high profile of these after being scolded by a judge in federal court). However, Sheryn Omeri, one of the lawyers representing Uber drivers in the UK, who also practices law in Australia, suggests the UK Supreme Court’s decision will be influential on future Australian cases. UK court decisions are “the obvious choice for Australia to look to”, she told me.

It is important to note that when it comes to regulating the “gig economy”, the judiciary, workers and trade unions cannot act alone. Governments must force companies to obey the law by way of prosecutions and fines. Indeed, the UK government has a particularly abysmal record on this, making the role of trade unions all the more important. But with last week’s decision, the exploitative “gig economy” business model has been dealt a decisive blow, and for that, couriers, drivers, and unions worldwide should celebrate.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.



Source link

Continue Reading

Companies

As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer

Published

on

By

Continue Reading

Trending

Copyright © 2019 Gigger.news.