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AB 5 is Such a Disaster in California, Pelosi and Congressional Democrats Push National Law to Destroy Gig Economy

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Because California’s AB 5 by Assemblywoman Lorena Gonzalez hasn’t done enough damage already to independent contractors and freelance workers in hundreds of different industries, Congressional Democrats and Speaker Nancy Pelosi are championing their own national version:  The Protecting the Right to Organize Act or PROAct, on behalf of the AFL-CIO.

Following the State of the Union, Pelosi announced Wednesday on Twitter: “The most important table in America is the kitchen table. Tomorrow, we will pass the #PROAct to protect Americans’ rights to join a union and raise the purchasing power of families across America. #ForThePeople.

Assembly Bill 5 by former labor leader Assemblywoman Lorena Gonzalez (D-San Diego), has already significantly limited Californians’ ability to work as independent contractors and freelancers. It was revealed during Senate debate in September that the AFL-CIO wrote AB 5.

Assemblywoman Gonzalez said in December, “These were never good jobs,” referring to freelance journalists, as justification for AB 5.

California freelance journalists are losing jobs en masse because AB 5 also randomly limits freelance writers and photographers to 35 submissions annually per media outlet. Members of the entertainment industry are seeing jobs cancelled in droves. And even ADA protected industries such as court reporters, captioners, and sign language interpreters, a majority of whom prefer the independence and flexibility of deciding when and where to work, are seeing their ability to work as independent contractors and freelancers in jeopardy, as California Globe reported.

The law, signed by Gov. Gavin Newsom, broadly codified the newest definition of an employee, established in 2018 in the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which dealt a blow to independent contractors. The Court ruled that the Dynamex delivery drivers were employees, rejecting its own prior test for determining whether workers should be classified as either employees or independent contractors,” Forbes reported.

According to many legal analysts, what the Court did was legislate from the bench by adopting a new rule for the narrow purpose of interpreting California’s Industrial Welfare Commission’s wage orders.

New York Democrats are trying to adopt their own version as well.

As California Globe reported recently, there are 56.7 million freelance workers currently enjoying life as independent contractors in America.

Assemblywoman Gonzalez and California’s Democrat lawmakers claim to care about workers, but only if they agree to unionize. They claim that the rideshare and app-based gig workers are being exploited by Uber, Lyft, Doordash and other app based businesses.

And despite AB 5 going through the legislative committee process, and hundreds of gig workers, business owners and independent contractors warning lawmakers that the bill would destroy many more jobs than just the gig economy app based businesses, they passed the law anyway.

Editorial boards throughout the state, including the Orange County RegisterSan Diego Union-TribuneSacramento Bee, and San Jose Mercury News said AB 5 would endanger the newspaper industry.

Gonzalez was warned AB 5 could destroy California’s entire Gig economy if passed and signed into law.

“In fact, 66 percent of Uber and Lyft drivers would prefer to remain independent contractors,” the Federalist reported. “The truth that lawmakers don’t want to admit is that gig workers willingly trade certain benefits for what they see as better benefits, and that the nature of work has moved away from the union model, and it’s not going back. Freelancers are de facto small business owners who run themselves as a company.”

Exemptions From AB 5 and Possible Fixes

In January, California Globe reported “The Superior Court of California in Los Angeles ruled earlier this week that independent truckers are exempt from AB 5.”

A new bill has been proposed to exempt freelance journalists from the independent contractor redefining AB 5 law in the California Senate. Senate Bill 868, authored by Senator Patricia Bates (R-Laguna Niguel), would also end the post AB 5 rule of limiting freelance journalists to 35 articles a year per publication.

A federal lawsuit by two drivers and Uber and Postmates seeks declaratory, injunctive, and other relief to determine that AB 5 is unconstitutional. Their lawsuit claims AB 5 violates the Equal Protection and Due Process Clauses of the Fourteenth Amendment to the United States Constitution, the Ninth Amendment to the United States Constitution, and the Contracts Clause of Article I of the United States Constitution, as well as the Equal Protection Clause, Inalienable Rights Clause, Due Process Clause, Baby Ninth Amendment, and Contracts Clause of the California Constitution.

The PRO Act, H.R. 2474, would preempt state labor laws, overrule three Supreme Court decisions, and transform the National Labor Relations Board (NLRB) into a punitive one. The PRO Act would:

  • Require workers to pay dues to a union
  • Change the definition of joint employment in order to ease union organizing;
  • Amend the definition of employee to increase the pool of employees eligible for unionization;
  • Impose government-mandated arbitration to dictate employment terms in first negotiations
  • Promote card-check organizing, a process that forces union representation on workers without a secret-ballot election.

With the many state and federal legal challenges to AB 5, for Pelosi and House Democrats to carry the water for the AFL-CIO on a national level, willing to kill 56 million freelance and independent contractor jobs, does not bode well in an election year.

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Insurance platform Collective Benefits raises £3.3M to give gig economy workers a safety net – TechCrunch

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The famous phrase “software eats the world” was originally coined to describe how technology gradually replaces the old industrial norms of production. But few realized that when Uber started to “eat” the taxi industry it would also be among the first harbingers of a new wave of what it meant to be “employed.” As similar gig economy platforms start to eat the old relationship between employer and employee — where some semblance of duty of care had developed — the gig platforms have yet to develop much caring for the gig worker. And as these platforms gain power, do they really want this to look like the re-emergence of serfdom? Gig work is coming to an industry near you, whether we like it or not.

Ideally, we need a new model that can deal with income minimums, benefits, insurance, pensions, etc., which responds to the dynamic way the world of work is evolving.

Collective Benefits is a startup aimed at tackling this growing “protection gap” created by the gig economy where so-called “self-employed” workers must often go without basic benefits such as family leave and sick pay, not to mention mental health support and critical injury pay.

The startup has today announced the closing of £3.3 million seed round led by U.K.-based Stride.VC, alongside existing investors Delin Ventures, Insurtech Gateway and several angels from executives at Uber, Deliveroo and Urban.

Collective Benefits has set out to build a tech platform that gives gig workers access to a full range of affordable, portable protections and benefits which they can carry around with them between the platforms they work on.

So instead of your benefits being tied to one employer, as is the current case, they can apply to any gig economy “employer” someone works for.

It’s also working with a number of on-demand service platforms who are giving their workforces access to these benefits. The startup will use the funding to further its growth and offering for gig platforms. A consumer service aimed at freelancers will follow later this year.

Anthony Beilin, CEO and co-founder of Collective Benefits, said in a statement: “There are six million self-employed workers in the UK, which includes both higher-paid freelancers and gig economy platform workers. Yet, neither group typically has a safety net — no holiday pay, no family leave, no mental health support, not even paid sick days. We are building Collective Benefits so that the gig economy workers are covered by the same protections typically reserved for full-time employees.”

The company provides a benefits platform for both gig economy platforms and self-employed freelancers (such as sick pay, family leave, and mental health support), but the platform is also designed to boost loyalty to the gig platforms amongst the workers, as well as reduce churn and talent acquisition costs.

Fred Destin, partner at Stride.VC, said: “We’re seeing services platforms gain unstoppable momentum in every segment of our lives, from rides to food delivery to freelancing. We need a new playbook. Collective Benefits addresses one of the core challenges in this brave new world of work, using technology to design and deliver a new type of safety net to all the participants in this fast-growing part of our economy.”

Robert Lumley, Director and Co-founder of Insurtech Gateway, said: “The insurance industry faces a massive challenge in keeping up with the extraordinary growth in self-employment. Collective Benefits has created entirely new insurance products for the self-employed not addressed by traditional insurers and accessible through a flexible tech platform that allows them to get the cover they need.”

The fact this startup has appeared just goes to show the market failure today due to the on-rush of new technology sprinting ahead of regulation. Some 96% of UK self-employed have no income protection, while 93% of UK self-employed have no health or critical illness coverage. PWC estimates that self-employed will account for 20% of labour force by 2025.

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How the industry is meeting the needs of the gig economy – COVER

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Montreal gig workers have to hustle, despite lack of labour protections

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A few years ago, Shanti Gonzales started waking up in the morning with no voice.

At the time, she was working a gig where she would sing to rooms of rambunctious children at libraries and schools, and it took a toll.

No amount of honey and tea and lozenges helped. She often would wind up hoarse by the end of her shift, meaning she had to stop working — at that job, and at her other gigs.

“I didn’t have anything to lean back on. I didn’t have paid time off. I didn’t have health insurance, I didn’t have any benefits. I didn’t even have someone to cover for me,” she said.

“Without these protections, you feel trapped.”

Like many her age, Gonzales, 24, is working in what’s called the gig economy. Though the term may bring to mind jobs that involve some kind of online platform (such as Fiverr or Foodora), it also includes those who work independent contracts for short, fixed periods of time.

The rise of the gig economy has led to a problem: workers who are juggling several different contracts don’t always have the protections, such as a human resources department, or a union, that salaried workers do.

Gonzales graduated from McGill with a BA in English three years ago, and since then, she’s never had a full-time job. She has worked as a musician, nanny, arts educator, administrator, copywriter and playwright.

In some of those jobs, she has faced discrimination based on her gender, her race, and her age, she said. But she never had many avenues of recourse.

A ‘rolling back’ of labour protections?

According to John Paul Ferguson, a professor at the Desautels Faculty of Management at McGill University, the gig economy has less to do with the type of work people are doing and more to do with the relationship between the employer and the employee.

Along with his colleague Matthew Corritore, Ferguson is surveying gig economy workers in Montreal to better understand their realities.

Ferguson says while there are some good things about the gig economy — like how online platforms can make it easier for people to contract for work — he has concerns about the effect of the gig economy on workers’ rights.

In the past, policies were put in place restricting casual labour because of concerns about exploitation, underpayment and unfairness, he said.

“The worry that those of us who have studied employment for many years have is: how much of this is just a rolling back of some of these protections that we put on our employees in the past?”

The province’s major labour laws do not apply to people who are self-employed. However, Catherine Poulin, a spokesperson for Quebec’s Ministry of Labour, said some self-employed workers in the gig economy may actually have an employer-employee relationship with their employer, and therefore are protected.

Gonzales, for example, is considered an employee at some jobs, but considered self-employed at others.

Those who face discrimination are also entitled to the protections under the Charter of Human Rights and Freedoms, and can file a complaint with the Quebec Human Rights commission, Poulin said in a statement.

Relying on a community

Gonzales says one of the most important aspects of the gig economy is knowing which gigs are good and which are not.

She relies on a community of people who meet up in person or chat over the phone to give each other advice about jobs and employers to avoid.

This tight-knit web of people also share opportunities with each other and recommend each other for jobs that may come up.

Gonzales said being a part of the gig economy can be isolating and leave people vulnerable because they don’t have co-workers.

“I think that’s why these little micro communities form. It’s the people: we’re ‘in it’ for each other. We’re in it to make sure that we can achieve each others’ goals, together. The community aspect is the thing I am fiercely protective of and fiercely invested in.”

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