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In the United States, the federal government is poised to extend unemployment insurance payments to gig economy workers for up to 39 weeks, and top them up by an extra $600 a week, as part of a $2 trillion economic stimulus package.
The UK government on Thursday unveiled what finance minister Rishi Sunak described as “one of the most generous” support programs anywhere in the world for Britain’s 5 million self-employed workers.
The plan mirrors wage subsidies promised last week to people in regular employment, providing the self-employed with a cash grant of 80% of their average monthly profit, up to £2,500 ($3,000) a month, over the next quarter.
Millions of people who don’t have full-time employment or who own businesses that rely on people getting together — such as taxi drivers, food delivery workers, builders, hairdressers and cafe owners — have been left unable to earn an income as governments shut down non-essential services and introduce strict social distancing measures.
In many cases they face an impossible choice: break lockdown rules, or stay home and earn nothing. Before Thursday’s announcement, self-employed workers in the United Kingdom were only getting tax relief and £94 ($114) a week through the benefits system.
Josie Ferguson, a 24-year old assistant buyer in London’s film and television industry, said she is losing £700 ($850) a week because a production she was working on has been postponed.
“It’s a complete shutdown. People won’t get paid and we get no help because we are contracted workers,” she told CNN Business. Ferguson considers herself lucky because she can live with her parents and has savings, but she said her friends in London will struggle to pay rent.
Uber CEO Dara Khosrowshahi welcomed the support proposedby the US government in the huge package that won Senate approval on Wednesday.
“The 1.3 million Americans who drive and deliver with Uber are facing extraordinary economic challenges,” he said in a statement. “Those who’ve lost the opportunity to earn need and deserve this support.”
A record 3.28 million Americans filed for their first week of unemployment benefits last week, the most in more than 50 years, according to the Department of Labor. Data from the Bureau of Labor Statistics shows that about 15.9 million Americans, or 10% of the country’s workforce, are self-employed.
Governments across Europe have already announced measures to help their self-employed workers, although they vary widely in scope and generosity.
In Germany, the region’slargest economy, companies with up to five employees qualify for a one-off grant of €9,000 ($9,900), while those with 10 employees will receive €15,000 ($16,500). The government has made an additional €3 billion ($3.3 billion) available to enhance social security benefits for the self-employed.
In France, small businesses and freelancers who make less than €60,000 ($66,000) a year can apply for €1,500 ($1,650) in aid if they are forced to close or if their revenue falls by more than 70% this month compared with March 2019.
Other support measures include reduced tax and social security payments, as well as a payment holiday on rent and utilities.
Italy’s 5 million self-employed workers, about 23% of the workforce, are receiving less support. The government’s pledge to subsidize 80% of employee salaries for nine weeks does not apply to them. Instead, they will receive a one-off payment of €600 ($660) and tax relief.
Law360 (April 9, 2020, 5:38 PM EDT) —
In 2019, California enacted A.B. 5, a controversial law designed to make it more difficult for businesses to classify workers — including those providing services in the gig economy — as independent contractors.
The new law, which went into effect on Jan. 1, codifies and expands use of the so-called ABC test in California to differentiate between employees (who are entitled to certain benefits and other protections under the law) and independent contractors (who generally are not).
Although worker classification has been a polarizing issue for many years, A.B. 5 — in conjunction with the continued expansion of the gig economy — intensified the debate. Soon after California Gov. Gavin Newsom signed the bill into law, businesses in several industries mounted challenges to the statute in court. In addition, lawmakers have since introduced a number of bills seeking to amend the law, or repeal it outright.
Despite the backlash in California, other states may soon follow suit. Indeed, New Jersey considered similar legislation in 2019, and Illinois and New York are expected to do so within the next year.
The motivation behind legislation like A.B. 5 is clear: extending the protections of various labor and employment laws — such as the right to earn minimum wage and overtime, and to collect unemployment insurance benefits — to as many workers as possible. But for many workers and small businesses, the legislation could do more harm than good.
As the U.S. Department of Labor acknowledged in an April 2019 opinion letter, the gig economy presents workers with unique entrepreneurial opportunities, including the right to simultaneously work on multiple different platforms; to work as much (or as little) as they want; to dictate when, where and how often they work; and to accept, reject and select among the job offers they receive.
As many employees would likely attest, this level of autonomy is irreconcilably inconsistent with an employer-employee relationship. And for many workers, it is precisely the reason they choose to provide services as independent contractors, rather than work in a traditional employment setting.
The coronavirus pandemic has increased the tension between parties on both sides of the debate over worker classification.
On March 26, for example, the New York State Court of Appeals reinstated a finding from the Unemployment Insurance Appeals Board holding that couriers who complete deliveries arranged through Postmates Inc.’s online platform are employees of Postmates, and as such, are entitled to unemployment insurance benefits under New York state law.
Although the Court of Appeals did not mention the coronavirus pandemic in its decision, the New York Attorney General’s Office issued a press release noting that the ruling is “particularly relevant today as New Yorkers and Americans across the nation battle the coronavirus disease 2019 … which has resulted in many workers losing their jobs and turning to unemployment insurance benefits to make ends meet.”
In most jurisdictions, courts and government agencies view a business’s extension of benefits (e.g., paid leave, medical insurance, retirement benefits, etc.) to independent contractors as strong evidence of employee status. Accordingly, although businesses may want to provide greater assistance to independent contractors who use their platforms, some may be reluctant to do so solely because of the current legal framework, which many believe has not yet adapted to the modern workplace.
The Coronavirus Aid, Relief, and Economic Security, or CARES, Act, which President Donald Trump signed into law on March 27, could provide insight into how U.S. labor and employment law, as applied to the gig economy, might evolve.
Notably, the CARES Act provides for enhanced unemployment benefits for both employees and independent contractors. Among other things, the act establishes a pandemic unemployment assistance program, which provides up to 39 weeks of unemployment insurance benefits to workers not otherwise eligible for unemployment compensation, including independent contractors and self-employed individuals, who are unable to work because of COVID-19.
Although the program is temporary, the CARES Act provides independent contractors and other self-employed individuals with a safety net during the pandemic, without jeopardizing their independence and autonomy.
Voters in California will have an opportunity to nudge California law in a similar direction later this year. In October 2019, a coalition of businesses and drivers announced a ballot initiative designed to preserve certain gig economy workers’ independence, and establish earnings and benefit guarantees. The initiative, known as the Protect App-Based Drivers & Services Act, will likely appear on the California ballot in November.
Under the proposal, certain app-based transportation and delivery drivers would necessarily qualify as independent contractors under California law, so long as they retain certain freedoms, such as the right to control the days and times at which they make themselves available to perform services.
Notwithstanding their independent contractor status, covered drivers would be entitled to various benefits, including 120% of the minimum wage, 30 cents per mile for automobile expenses (e.g., fuel, and vehicle wear and tear), health care stipends, occupational accident insurance, automobile accident and liability insurance, and protection against discrimination and sexual harassment. In other words, if approved, the initiative would both preserve workers’ independence and guarantee their entitlement to certain benefits.
The prospect of extending benefits to independent contractors is not a new concept, and lawmakers in multiple jurisdictions proposed bills with similar objectives long before the coronavirus pandemic. However, the pandemic — and the federal government’s decision to temporarily extend unemployment insurance benefits to independent contractors through the CARES Act — may accelerate the rate at which businesses and lawmakers around the country explore alternative approaches to the traditional framework in their respective jurisdictions.
Accordingly, both businesses and workers — many of whom place a premium on the autonomy and entrepreneurial opportunities available to them in the gig economy — should be mindful that changes could be on the horizon.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 See U.S. Department of Labor, Wage and Hour Division, Opinion Letter FLSA 2019-6 (April 29, 2019).
 See Matter of Vega (Postmates Inc. – Commissioner of Labor), 2020 NY Slip Op 02094 (NY Ct. App. March 26, 2020).
 For example, the dissenting opinion in Matter of Vega acknowledged that “[w]e need a clear understanding, comprehending the modern realities of our rapidly evolving economy, of who should be an employee and who an independent contractor, including whether work relationships should continue to be measured on that dichotomy. It is past time for the law to reexamine the definition of work and its application to different forms of entitlement and obligation.”
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You wake up with a scratchy throat and a tight chest, but otherwise you feel OK.
It’s most likely not COVID-19, but you know you should stay home, just in case.
But what if you can’t stay home and still pay the bills?
“I’ve been that way for the past week — with just a cough. And maybe it’s just a cold or allergies. It could be, but the fact is that I’m out there, I’m shopping for people’s items,” said one San Antonio Instacart shopper who asked to remain anonymous. “I need to make money, and I’m going to put that aside.”
With many San Antonians hunkered down, complying the city’s restrictive stay-at-home orders, gig workers are on overdrive trying to meet the flood of restaurant deliveries and grocery store shopping orders.
Those grocery shoppers and delivery drivers receive virtually no benefits, and each day face an elevated risk of contracting the virus.
The more one works to meet the demand, the greater the risk of getting sick. And with no sick leave, workers said they’ve had to choose between their livelihood and the public’s health and their own.
“I’m trying to decide if I want to continue to work as hard because I know that every time I set foot in a grocery store, I’m increasing the likelihood that I will get sick,” said one Shipt shopper who also requested anonymity so her Shipt account would not be deactivated. “If I get sick, I’m not going to be covered, and nobody is paying my bills.”
The pandemic has shown the absence of a safety net for gig workers, and has brought renewed public scrutiny to the technology-enabled gig economy, in which companies such as Uber, Shipt, Instacart, Lyft and others classify workers as independent contractors rather than employees.
That classification gives gig workers a greater degree of flexibility than most other workers, who can set their own work schedules. But it also means companies are largely able to avoid offering unemployment, health care or sick pay to workers.
“Corporations have long made the case that the nature of work is changing — people want flexibility in the 21st century economy,” said Brian Chen, a staff attorney with the National Employment Law Project and an advocate for gig workers. “But then you see these very low-paid individuals working through a pandemic just to pay the bills, and that shows you the reality of how much flexibility these workers have.
“This COVID pandemic has shown we have an entire group of workers who have no rights under our labor laws,” he said.
Over the last month, companies such as Instacart and Shipt have touted the protections and benefits they’re providing to workers during the crisis. The companies agreed to ease rules around grocery delivery time frames, made it easier for shoppers to pay and are waiving poor customer reviews.
The companies also said they’ll be providing workers with hand sanitizer and cleaning products in coming weeks.
“Our teams are working around the clock to safely serve all members of our community, and we’re incredibly grateful for Instacart shoppers like you who have stepped up as household heroes during this time,” Instacart CEO Apoorva Mehta said in a note to workers late last month.
Along with Uber and Lyft, the companies also offered 14 days of paid sick time off for workers who test positive for COVID-19, though testing capacity is still limited in San Antonio and across the nation.
“It still seems like a joke,” said the Instacart shopper. “It’s already really difficult to get a test. Just because you have coronavirus doesn’t mean you’re going to get a test. It seems like it was a fake thing for Instacart to put up and say, ‘Oh, we’re doing this.’ But here’s all the fine print. It made a lot of people who didn’t read into it feel better.”
In separate interviews, four San Antonio gig workers all said they willingly take on the day-to-day risks of their work — that is, frequent contact with strangers. They said they’re committed to helping vulnerable people during the pandemic.
Many gig grocery shoppers work exclusively with clients wuth whom they’ve built a rapport. The majority of customers on Instacart and Shipt are elderly or people with weakened immune systems particularly at threat from the virus, shoppers said.
“When we all initially got into gig work, we got into it for a financial reason,” said a second Instacart shopper, who is also a health care worker and a nighttime Uber driver. “You need to close a gap in income. You need to pay for an extra class for college. You have unforeseen medical expenses. But when coronavirus hit, that reason changed for a lot of people.
“There is a bit of fear involved with me going out and going shopping, being in public when we’re told we shouldn’t be,” she said. “However, what would these people do if I didn’t do it?”
Several gig workers also said they enjoy the benefits of the flexible, informal nature of the work they do.
“It’s easy to pick up on, and you don’t have to register or fill out a lot of documentation,” the first Instacart shopper said. “You just open the app and get started. With the way we’re independent contractors, it would absolutely be nice if we have some benefit of health insurance. But the price you pay is you have such flexibility. ‘I’ve got an hour to kill? Maybe I can pick something up.’”
These days, the average gig grocery shopper in San Antonio starts their day at about 7 a.m. waiting in line outside of an H-E-B. After the hour-long wait for the store to open, shoppers dash inside — first to the cleaning supplies aisle, then a race to find any leftover perishable goods, such as ground beef.
Rideshare drivers have complained of a sharp drop in ridership recently, but shoppers said demand has skyrocketed for them in recent weeks. Before the pandemic, the first Instacart shopper may have completed 5 or 6 grocery orders in a full day; he now fulfills about 12 to 13 orders.
Two months ago, there may have been 20 to 30 grocery orders on the Shipt app at the start of each day, one shopper said. Now, there are between 600 and 700 orders at the start of every day, and around 250 orders go unfulfilled daily.
“The way I think of it is every offer is one family that needs groceries or cleaning supplies, so it’s kind of overwhelming because at the end of our days, it’s like 250 families we still haven’t helped,” the Shipt shopper said. “San Antonio has probably 2,500 (Shipt) shoppers. There’s a lot of shoppers, but a good portion of regular shoppers have stopped shopping because they’re scared of getting sick.”
Uber CEO Dara Khosrowshahi recently asked President Donald Trump to provide relief for gig workers in the $2 trillion stimulus package passed by Congress last week.
The Pandemic Unemployment Assistance provision included in the package provides $600 per week in unemployment benefits for gig workers in Texas affected by the viral outbreak.
But while the benefits may help some gig workers in the short term, experts note the federal government funding unemployment insurance for them isn’t sustainable.
Under normal circumstances, gig workers don’t qualify for unemployment. Employers pay a payroll tax for each employee, which contributes to the pot of money in each state that’s available for workers seeking unemployment.
Because gig-economy platforms don’t classify workers as employees — oftentimes labeling them “entrepreneurs” — they don’t offer benefits or pay into the unemployment insurance fund for workers.
That’s left the general taxpayer to foot the bill for gig workers’ unemployment insurance.
“In a system working correctly, gig workers in Texas would by any measure be classified as full-time employees and would qualify for regular state unemployment insurance,” Chen said. “And it would be corporations like Uber and Lyft paying their fair share in the unemployment system, rather than have the government cover it during an emergency.”
Khosrowshahi and other tech executives have argued workers on the different platforms prefer flexibility, and categorizing drivers or shoppers as full-time employees would mean they’d lose the freedom to work when and where they want.
A Barclays analysis last summer found it would cost Uber and Lyft hundreds of millions just to reclassify drivers in California as employees, and could potentially bankrupt both companies.
In the meantime, the gig workers interviewed for this story, lacking health care benefits, said they’re doing what they can to keep themselves and their customers virus-free.
Each worker detailed their hygiene routines, which include sanitizing and spraying Lysol several times per day, and also sanitizing grocery bags before they’re left at a customers’ door, among other precautions.
The day ends with the shoppers immediately throwing their outfit in the washer and taking a shower.
“So many of the customers that I have right now, they’re elderly, and they’re like my family at this point,” said a second Shipt shopper. “I know I’m doing what I can for my family at home to reduce their risk of getting something from whatever I may have come in contact with potentially. But other people don’t have that option. There’s that feeling of a call to duty.”
Several gig workers said they have considered filing for unemployment, but said they would rather continue working if they’re able to.
They also said they hope the pandemic makes consumers reconsider the value of gig work.
“People are seeing the inequality at work when you have a certain set of people that are doing such essential work, but are so left behind by our existing labor laws and by employers,” Chen said. “What is the value of this work? Why don’t these workers have the most basic and fundamental protections at work?”
David Higgins, EMEA Technical Director, CyberArk.
The ‘gig economy’ is described as many things. On the one extreme, it is depicted as symptomatic of the decline in the traditional nine-to-five day job with a stable income, while on the other, it is viewed as the jet fuel powering the new world economy.
This new economy is driven by the increasing trend whereby companies hire independent contractors and freelancers, instead of full-time employees, paying them for each individual ‘gig’ they do.
It certainly holds a lot of promise for this continent, and has in fact been dubbed ‘the future of work in Africa’ by the Centre for Global Development, mainly due to the fact that the vast majority of the continent’s workforce are self-employed and freelancers.
As with elsewhere on the continent, this approach also holds true for South Africa, as despite an unemployment rate that remains in the doldrums, analysts suggest the gig economy can play a big role in alleviating the problem of joblessness in the country.
While the typical gig economy worker is usually, as an example, described as a part-time Uber or Deliveroo driver, the fact is that IT contracting is a very common gig economy role. In fact, even traditional retail and corporate powerhouses now comprise a mix of full-time, part-time and short-term workers. This ensures they can remain nimble, cost-effective, and able to adapt to changing market conditions in a fast-paced, technology-led environment.
It is unsurprising that a large portion of the gig economy is dedicated to IT, since it is in line with how modern enterprises approach IT in general. Being able to deploy more or less IT expertise as the situation demands is akin to usage of cloud services. It’s quick, it’s flexible, and it meets the changing needs of the business.
One thing that it is not, though, is inherently secure. The risk model has shifted from a model built around controlled environments; ie, corporate networks.The perimeter – the first line of defence – was a known quantity and yes, it had holes, but generally IT departments were aware of where the weak points were. Now, the perimeter is at best distributed, and at worst non-existent. Put bluntly, the risk is that companies can no longer enforce security on the end device, as they may have no jurisdiction or control over it.
The challenge arises because IT workers perform some of the more crucial roles in 21st century organisations, since every business relies on information and technology in order to function. It’s assumed that large quantities of critical data, and at least a few critical assets, will need to be stored and managed in order for the business to serve customers, meet manufacturing deadlines and more. Therefore, it is common that IT employees are subject to strict security oversight.
However, when these roles are performed by remote third-parties, short-term contractors or otherwise not by permanent, trusted staff that are office-based, security simply has to adapt to this new way of working. After all, as flexible workers plug into an organisation’s network and access sensitive company systems from outside the physical perimeter of the office, these organisations need to ensure they have strict security protocols in place to mitigate the elevated risk that this entails.
They also need to ensure that remote gig workers are only accessing what they need to, instead of trusting them with sweeping access to everything. Risk factors include accessing networks from personal devices that lack enterprise-grade security, or from home networks that could be easily compromised. In this scenario we are far away from a world where security teams are able to enforce policy on devices within the traditional network. Now, often they will have no control at all over the device being used by the external party to connect in and, similarly, not being able to ensure the security of the location where the device is connecting from; for instance, a home WiFi network.
According to CyberArk global research, 90% of enterprises allow third-party vendors access to their critical systems and 72% put third-party access in their top 10 security risks. This indicates the problem is widespread and the risk is understood.
The real issue, then, is whether it is acted upon. If not, gig economy workers put themselves and their employers at risk of data breaches, leaks of confidential information and more. However, recent advances in technology mean the shortcomings of older ones – like virtual private networks (VPNs) – in securing remote workers can now be overcome.
Some of the ways to do this include using biometrics, Zero Trust and just-in-time provisioning, all of which can and should be employed to reliably authenticate remote vendor access to the most sensitive parts of the corporate network. In the gig economy environment, where endpoint devices have disparate levels of security and the office environment can be a café, car or home office, it is clear that cyber security needs to match the flexibility of modern working. The place where organisations can reliably enforce policy is at the point of connection and the access that they require into systems. This needs to be recognised and implemented.
Technology is ultimately the glue that holds the gig economy together, building platforms that enable the agile and flexible matching of supply and demand, and the analytics to optimise it all. It connects freelancers with their clients and businesses with the skills they need. It is obvious that remote working is only going to continue to grow – possibly spurred to new heights by the COVID-19 lockdown – which means it is imperative that organisations considering making use of the gig economy tighten up and improve their security sooner, rather than later.
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