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Liberals in Congress seek to punish right-to-work states, strangle gig economy

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Thomas Jefferson once wrote, “To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.” Today, Speaker Nancy Pelosi will bring to the House floor H.R. 2474, which would do just that.

The Protecting the Right to Organize or PRO Act would force workers to fund unions. Rather than require unions to increase transparency and accountability, Democrats are enabling labor union leaders to exert political influence, harming very workers they purport to protect.

There isn’t a single person in this country who is in favor of unsafe working conditions, inadequate compensation for competent work, or a toxic work environment. While the PRO Act claims to be in favor of combating these issues, it would instead make it more difficult for employers and businesses to invest in American workers.

The American Action Forum predicted in a recent report that employers will face nearly $50 billion in new annual costs from the implementation of the PRO Act, which will only shrink the number of employees they can hire. We need to ensure that the people this proposal claims to defend are not harmed by the adverse consequences of these ideas.

By creating new obstacles for companies to hire independent contractors, this bill would suffocate the gig economy, to which people are increasingly turning for the freedom, flexibility, and adaptable income that it offers. Many of these hardworking individuals prefer the liberty of freelance contracting over the less flexible opportunities available through traditional full-time employment. They would lose opportunities under this prohibitive legislation.

The PRO Act also mandates that employers collect and report workers’ private, personal information, such as addresses and phone numbers, to union organizers — without the workers’ consent. Giving union bosses more power without measures of accountability also facilitates corruption that is already flagrant in several industries — corruption that in some cases includes the direction of union workers’ dues toward lavish personal spending of senior-ranking union officials.

The PRO Act would force more workers into a one-size-fits-all union contract — to make them sacrifice a chunk of their paychecks involuntarily as an automatic condition of employment. Workers would have to pay an additional aggregate of millions of dollars out of their hard-earned paychecks even if they do not want to be represented by a union. It inherently infringes upon the rights and paychecks of workers. A worker’s access to work and the ability to support their families should not be dependent on contributions to an entity that may not have their best interests in mind.

Twenty-seven states, including my home state of Arkansas, have right-to-work laws that guarantee that workers cannot be forced to join a union or pay union dues as a condition of employment. In accordance with the values our country was founded upon, I believe that citizens deserve the freedom of choice in matters affecting their livelihoods. Right-to-work protections also guarantee that, if a worker opts out of paying union fees, he or she will not be excluded from the basic protections deserved by all workers in the workplace.

The PRO Act would overturn right-to-work laws in all of those states, infringing on state powers and the individual liberties of American workers to choose the best opportunities for themselves and their families. Official statistics from the Department of Labor show that right-to-work states have greater economic vitality because of their lower unemployment rates and fewer work stoppages. Right-to-work is a demonstrated better economic model for states.

The PRO Act ironically steals freedom of choice from the workers of America. For Arkansans and others, the PRO Act violates liberties intended to be protected by the Founding Fathers. The imprudent PRO Act will chip away at workers’ rights and employer opportunities; it would harm the economy while rewarding labor union bosses. Protection of America’s workers and their right to work are crucial to the economic success and prosperity of our beloved country.

U.S. Rep. French Hill, a Republican, represents Arkansas’ 2nd Congressional District.



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Economy

Edtech, logistics and gig-economy to drive jobs as startups step up hiring

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After a year of job uncertainties and salary reductions, the startup ecosystem is stepping up its plans with most large gear up their growth plans. According to a survey by Scalar, venture capital-funded start-ups, especially in edtech, and gig-economy will be key drivers of the job market in 2021.

Live learning platform Vedantu plans to hire 1,500 employees across all levels with domain expertise in the field of technology, product, finance, strategy & HR this year. “Due to the tremendous potential of online learning in current times, it is our duty to ensure that all students and teachers get a perfect experience of our product. Hence, we are ramping up our across all domains from India’s premium B-schools and engineering institutes,” said Vamsi Krishna, CEO & co-founder, Vedantu.


Mumbai-based start-up Lido learning is looking at close to 1,000 employees in the next one month. The recruitment is diverse, spanning across roles like tutors, customer support personnel, sales and marketing executives, in addition to building strength for already existing teams. The numbers represent hiring around 500 tutors, and over 400 sales and customer support executives.

“There has been a big surge in startup hirings in the past two to three months and it is not only limited to fintech or All segments including consumer tech, SaaS, gaming and media tech are now picking up,” said Anshul Lodha, regional director at global recruitment consultancy Michael Page.

The Covid-19 outbreak impacted several as business contracted and many had to take harsh decisions of giving pink slips. For instance, Food tech platform Swiggy which had handed pink slips to over 1,400 employees after the pandemic broke out last year, has gone back to 2019 level hiring plans for the March quarter with an increased focus on technology and product functions.

“Attracting the right talent in engineering, product, data science & ML is our primary focus while also looking at strengthening our business category and supply chain teams for our new initiatives. This would be a mix of both entry-level roles (15-20 per cent) and lateral hires,” said Girish Menon, Head of HR at Swiggy.

The need to hire aggressively also comes at the back of fund raise that the startup ecosystem has seen as they see business demand rising. Walmart backed PhonePe managed to reach the milestone of 1 billion monthly payment transactions.

PhonePe has about 700 positions to close in 2021. “Despite the lockdown, our headcount grew by 700 people across roles since the end of February 2020 taking our employee strength to 2,240,” said a PhonePe spokesperson.

The Tiger Global-backed startup is also expanding its offline merchant network to 25 million (currently at 16 million) by the end of 2021 across rural and semi-urban areas.

This expansion will be creating 10,000 jobs across 5,500 talukas wherein people will be hired from the locally available talent pool to service the merchants.

Fintech unicorn Razorpay will be hiring 650 employees across its engineering, products, customer experience, sales and marketing teams in the next 10 months, to meet the growing payment and banking needs of small and medium enterprises (SMEs) and freelancers. The Bengaluru-based startup had onboarded 550 employees in 2020.

According to Teamlease, freshers hiring is expected to be higher this year given that the 2020 pass-out intake just started around November-December 2020 and the activity has increased in Q1 of 2021. “Freshers hiring is expected to more than double compared to last year. Lateral is also in the positive trajectory, some of the roles that laterals are preferred are full stack developer, content writers (mostly copy writers) whereas for roles testing, sales, teachers and digital marketing are open to take freshers,” said Kaushik Banerjee, Vice President and Business Head of Teamlease & Freshersworld.

IPO-bound Zomato, which had laid off 13 per cent of its 4,000 workforce last year on account of Covid-19 related impact, is planning to hire 400 employees this year, according to reports.

Online grocery platform Grofers, another startup which is drawing up IPO plans, has an ongoing talent reinforcement primarily in technology, supply chain and demand functions. “Our focus continues to build high performing teams across the organization with a blend of fresh perspective and diverse experience,” said Ankush Arora, Head HR, Grofers.

Startup job openings

. PhonePe has 700 positions to close in 2021

. Razorpay to fill 650 positions

. Vedantu to hire 1,500 employees across all levels

. Swiggy to focus on technology and product functions

. Grofers looking at technology, supply chain roles

. Zomato planning to onboard 400 employees



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The impact of the gig economy on e-commerce and its sustainability

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The growth of the gig economy, where short-term contracts or freelance work prevail as opposed to permanent jobs, has enabled people to increase their income and run multiple ‘side-hustles.’

In the gig economy, participants enjoy the flexibility of choosing what to do and when to work, and the convenience of being matched up with potential clients through mobile apps.

In Kenya, ride-hailing apps and online professional workers comprise the lion’s share of the gig economy both in value and number of workers.

Research from Mercy Corps suggests that the offline Kenyan gig economy will reach USD28.95 billion in 2023 from USD19.6 billion in 2019 and will employ a total of 5.7 million workers.

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The growth of gig economy is fueled in part by mobile, internet and smartphone penetration and the proliferation of mobile money in Kenya. Mobile money platforms such as M-Pesa have become the second most-used payment channel in Kenya after cash.

Ecommerce has skyrocketed in Kenya with the number of customers and businesses running their transactions online rising. 

Glovo is an on-demand technology platform that connects customers with riders to get products delivered through a mobile app.

Priscilla Muhiu (pictured above), Glovo’s general manager for Kenya shares on the gig economy, e-commerce and COVID-19.

The impact of the gig economy on e-commerce and its sustainability – The gig economy has given Kenyans the freedom to work and live more efficiently and effectively. It has also opened up an innovative new revenue stream for the continent — allowing millions to take up flexible work on their own terms.

Gig work is becoming increasingly important as a potential pathway to socio-economic development and employment creation, given Africa’s unique status as the continent with the youngest population in the world amongst the highest youth unemployment rate.

Impact of Covid-19 to the business and how the company survived- As part of the protocols put in place by the government to stem the tide of the pandemic, consumers created and reinforced new online buying behaviors and habits.

Consumers were more motivated than ever to shop online and have deliveries made at their doorstep and the ripple effect of this was a 30 per cent increase in grocery orders in Kenya as reported by Glovo in 2020.

The evolution of online delivery space and the overall outlook of the on-demand delivery market- As the online retail space continues to expand, consumers are choosing click retail over traditional brick and mortar stores.

Online retail presents a unique opportunity to have a positive impact on the Kenyan economy including job creation for riders and a business lifeline for restaurant owners.

This shift in consumer behavior, coupled with the advent of Covid-19 and increase in internet penetration, has seen the rapid growth of on-demand delivery start-ups.

What strategy plans does Glovo have for Kenya in 2021? – We are looking at offering more competitive delivery fees. We will continue to expand into new towns in Kenya and getting into various partnerships that will benefit the consumers.

Pricilla’s key lessons in life – You are not defined by what is in your head, you are what you do, you don’t have to feel like today is your day, you just have to act like it is. Actions may not bring happiness but there’s no happiness without action and also one of my favorite lessons is, life is not a shop for your pauses and your procrastinations.

 

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Economy

Department of Labor Withdraws Gig Economy Opinion Letter that Supported Independent Contractor Classification | Benesch

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On February 19, 2021, the Department of Labor’s Wage and Hour Division withdrew its opinion letter that indicated gig economy workers who offer services in a virtual marketplace are independent contractors.  The Wage and Hour Division had previously published this opinion letter, FLSA2019-6, on April 29, 2019.  This recent withdrawal is another signal that the Department of Labor under the Biden administration is closely scrutinizing the classification of workers as independent contractors.

The Wage and Hour Division previously published the now-withdrawn opinion letter in response to a request from a “virtual marketplace company” that connects service providers with individuals seeking those services. The withdrawn opinion letter opined that the workers offering services in the virtual marketplace platform “are independent contractors, not employees of [the virtual marketplace platform]” based on the Department of Labor’s long-standing six-factor “economic realities” test to determine the worker’s economic dependence on the entity at issue. The six factors are:

1. The nature and degree of the potential employer’s control.
2. The permanency of the worker’s relationship with the potential employer.
3. The amount of the worker’s investment in facilities, equipment or helpers.
4. The amount of skill, initiative, judgment or foresight required for the worker’s services.
5. The worker’s opportunities for profit or loss.
6. The extent of integration of the worker’s services into the potential employer’s business

The withdrawal of FLSA2019-6 is an “official ruling” of the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259. Parties may no longer rely on opinion letter FLSA2019-6 as a statement of agency policy as of February 19, 2021.  Businesses should note that opinion letters are not legally binding, but parties can present opinion letters in court as persuasive guidance to boost claims or defenses in cases involving similar issues.  For the time being, there is no definitive, revised stance from the Wage and Hour Division until it publishes a new opinion letter on the question of classification of gig economy independent contractors.

The withdrawal of this opinion letter follows the Department of Labor’s proposed delay of the effective date of the Trump-era final rule entitled “Independent Contractor Status Under the Fair Labor Standards Act.” The Department of Labor has proposed to delay the effective date of the final rule in order to provide additional time for review and consideration of the rule.  In its withdrawal notice posted to opinion letter FLSA2019-6, the Wage and Hour Division noted as follows: “This letter addressed the same issue under consideration by the Department—independent contractor status under the FLSA. Thus, consistent with its proposed delay of the final rule, WHD is withdrawing this opinion letter.”

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