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Gig workers hit by coronavirus downturn could have long wait before obtaining unemployment benefits

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In California, Illinois, Washington and a slew of other states, local unemployment officials are signaling that they aren’t yet ready to start processing aid for laborers in what is known as the gig economy. Already inundated with record numbers of jobless claims, and lacking federal guidance, many states say they need more time to set up a new system that can process additional benefits — and some say they may not be able to accept applications until later in April.

Until now, many gig workers were ineligible for traditional unemployment benefits, even if driving passengers or delivering goods was their primary source of income. That’s because they are often categorized as independent contractors, not full-time employees, for companies such as Airbnb, Uber, Lyft and Postmates. Those companies don’t remit payroll taxes to the government on behalf of on-demand laborers, making it difficult, if not impossible, for workers to take advantage of safety-net programs.

Congress sought to remedy the gap temporarily. Part of the coronavirus stimulus bill, known as the CARES Act, which was enacted by President Trump on Friday, includes a federally funded pandemic relief program for an array of self-employed people. But it has become increasingly clear to some in the industry that delays in disbursing aid could make it hard for them stay afloat financially.

Anwaar Malik, a driver for Uber and Lyft in Long Island, said he applied for unemployment aid in New York, the epicenter of the U.S. coronavirus outbreak, immediately after he learned that the CARES Act had become law. At the time, though, New York did not appear set up yet to process his claim, leaving Malik’s application in limbo.

By Wednesday, Malik said, he had made more than 1,000 calls to follow up with the state’s unemployment office, mostly without success. That same day, the New York State Department of Labor said it put out a step-by-step guide to help gig workers apply for aid in an effort to address the difficulties other on-demand laborers have also faced. But those resources weren’t readily apparent to drivers like Malik, who offered a grim assessment that afternoon about the future.

“Drivers’ lives are at risk if they don’t get this money,” he said.

The hardships facing gig economy workers, and vexing state and federal officials, illustrate the mammoth undertaking involved in bringing the country’s coronavirus recovery effort online. It takes time to dole out billions of dollars in aid and establish new government programs — time leaders lack if they hope to blunt the havoc wreaked by this deadly pandemic.

As businesses continue closing their doors — or issuing mass furloughs or layoffs — workers have flooded state employment agencies with pleas for jobless aid. Their websites are bogged down and their phone lines are flooded, leaving many Americans with long waits for financial help at a moment when they’re struggling to pay the bills. Some states have told residents to apply for benefits only on certain days, depending on the first letter in their last names, to ease the congestion.

The coronavirus law also requires states to administer new benefits to people who are self-employed, a category that includes workers whose primary income comes from working on behalf of Airbnb, Uber and other companies in the gig economy.

The new relief fund provides weekly aid to those affected Americans, along with the same extra $600 laid off and furloughed full-time employees are slated to receive for the weeks they are out of a job.

Already, gig workers and labor activists are scrambling to obtain the money — and reporting difficulties in navigating the government’s complicated relief package. In California, the home base for Uber, Lyft and other Silicon Valley giants, state officials don’t appear ready to handle applications, said Veena Dubal, an associate professor at the University of California, Hastings College of the Law, who is an advocate for gig workers and labor rights. She added that some gig workers who have applied for benefits over the past few days have been told they aren’t eligible.

California’s Employment Development Department, which oversees unemployment payments, said Wednesday that it plans to act swiftly but is awaiting key guidance from the U.S. Labor Department, echoing a concern shared by other states, including Maryland and Virginia. The Labor Department did not respond to a request for comment.

Dubal said it’s a sign of the challenge millions of gig workers nationwide are bound to face. “There is a lot of confusion about how the states are going to be rolling out the benefits provided in the CARES Act,” she said.

Accepting applications, determining eligibility for benefits and processing payments for these previously uncovered workers is likely to be resource-intensive for many states, and through no fault of their own. Their budgets are dwindling, and their staffs may be home as a result of the coronavirus, adding to the possibility that it could be weeks before some workers see their first check.

By Wednesday, unemployment officials in Colorado and Pennsylvania advised ride-share and delivery drivers to hold off on seeking aid until their systems were in place. Illinois’ website simply said: “Please do not apply at this time.”

On its website, Washington state also said it needed time and acknowledged that necessary upgrades would not be “complete by mid-April.” However, it reiterated that workers are eligible for payments from when their employment was first disrupted by the coronavirus outbreak. The state’s Employment Security Department did not respond to a request for comment.

Meanwhile, in Maryland, the state’s computers are “currently not set up to process these new CARES Act programs immediately,” said Fallon E. Pierce, a spokesperson for the unemployment agency. Pierce said it would take time to “create new IT systems, modify our current technical systems, train staff, and conduct tests.”

Adding to the challenge are gig economy companies themselves.

For years, Uber, Lyft and their industry peers have contended that their workers are not employees and sought to stave off regulation that would upset their business models. As a result, these companies have avoided paying taxes into the pot of government funds that ultimately covers workers when they are out of job. Amid the pandemic, their approach has prompted fresh criticism that Silicon Valley essentially received an undeserved government “bailout.”

With new unemployment programs coming online, some activists said the companies now have a new obligation to do their part — including by making wage data available to states so that they can process claims more quickly.

“It’s a significant hurdle for drivers, which these companies could solve tomorrow,” said Rey Fuentes, a fellow at the Partnership for Working Families, which advocates in the San Francisco Bay area for greater benefits for gig workers.

In response, Uber spokeswoman Susan Hendrick said in a statement that the company would work with “states as they establish their process for independent workers to apply for unemployment.”

Lyft spokeswoman Julie Wood said the company had also been in talks with states, adding that it recently held a call with drivers to inform them about possible benefits.

In the meantime, some labor activists said, many gig workers remain at risk. Many drivers for ride-hailing apps, for example, cash out their earnings more than once a week, said Moira Muntz, a spokeswoman for the Independent Drivers Guild, a Machinists Union-affiliated group that represents more than 80,000 drivers in New York City. “They’re not even paycheck-to-paycheck — they’re day-to-day,” she said.

In Long Island, Malik said he stopped driving for Uber and Lyft last week, fearing he might catch the coronavirus from one of his ride-hailing passengers and pass it along to his family. Without unemployment benefits soon, though, he said, he may have no choice but to return to the road.

“If I don’t get it,” he said, “I’m going to have to go back to work.”

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Global Global Gig Based Business Market Analysis, Size, Share, Growth, Trends and Forecast to 2026

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Global  Global Gig Based Business  Market Analysis, Size, Share, Growth, Trends and Forecast to 2026

Global COVID-19 Impact on Global Gig Based Business Market Report industry size, share, growth, trends and forecast analysis up to 2026. COVID-19 Impact on Global Gig Based Business Market Report also covers top key players, porters five forces analysis and market segmentation in detail. This report examines the global COVID-19 Impact on Global Gig Based Business market and provides information regarding the revenue for the period 2020 to 2026.

The research report on ‘COVID-19 Impact on Global Gig Based Business market’ provides a detailed assessment of the industrial outlook while elaborating on the numerous market segmentations. Additionally, the report provides notable inputs in terms of the impact of COVID-19 on the industry growth. An analysis of various drivers, opportunities, and restraints influencing the industrial outlook is also covered in the study. Furthermore, it also elaborates on the regional landscape as well as the competitive terrain of the COVID-19 Impact on Global Gig Based Business market. The document underlines key aspects of the COVID-19 Impact on Global Gig Based Business market like the current revenue and sales stats and the estimated figures during the analysis period.

The report also consists of detailed insights on product information and ranks the manufacturers operating in the COVID-19 Impact on Global Gig Based Business market based on the revenue generated. The report is structured using analysis principles including Porter’s five forces analysis, bottom-up and top-down approach, and data triangulation.

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  • As per the report, TaskRabbit, Guru, Rover, HopSkipDrive, Freelancer, Fiverr, Favor Delivery, Upwork, DoorDash, BellHops and Turo companies formulate the competitive terrain of COVID-19 Impact on Global Gig Based Business market.
  • Important company-related information such as business overview, revenue generated, sales, and gross margin are cited in this report.
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  • The report segments the type terrain into Website-Based and APP-Based.
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  • The application spectrum of the COVID-19 Impact on Global Gig Based Business market is classified into Freelancer, Independent Contractor, Project Worker, Part-Time and Other.
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  • Important aspects like value chain and sales chain analysis is covered in this report.
  • A granular study on distribution channel, including producers, distributors, and end-users are underlined in the report.
  • Manufacturer merger and acquisitions, and expansion plans are also included in this study report.

What are the market factors that are explained in the report?

Key Strategic Developments: The study also includes the key strategic developments of the market, comprising R&D, new product launch, M&A, agreements, collaborations, partnerships, joint ventures, and regional growth of the leading competitors operating in the market on a global and regional scale.

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Seattle Mandates Temporary Premium Pay and Other Benefits for Certain Gig Economy Workers During Pandemic

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As we wrote about in more detail here, the ongoing coronavirus pandemic has brought increased attention to the legal and practical distinctions between employees (who are entitled to various compensation and employment benefits under the law) and independent contractors (who generally are not). The pandemic has also prompted lawmakers at the federal, state, and local level to explore further legislation designed to provide independent contractors with greater protections under the law.

The Seattle City Council has now passed two ordinances—the “Gig Worker Premium Pay Ordinance” and the “Gig Worker Paid Sick and Safe Time Ordinance”—that will temporarily impose heightened requirements on transportation network and food delivery network companies.

The Gig Worker Premium Pay Ordinance

The Gig Worker Premium Pay Ordinance went into effect at 8:30 p.m. on June 26, 2020. According to the City Council, the ordinance is designed to “increas[e] [the] retention of gig workers who provide essential services on the frontlines of a global pandemic and who should be paid additional compensation for the hazards of working with significant exposure to an infectious disease.”

Under this ordinance, food delivery network companies are required to pay delivery drivers at least $2.50 in premium pay for each delivery they complete with a pick-up or drop-off location in Seattle. If the order involves multiple pick-up or drop-off points, drivers are entitled to an additional $1.25 in premium pay for each additional pick-up or drop-off point in Seattle.

The ordinance requires food delivery network companies to remit premium pay at the same time at which they provide compensation for other components of the delivery, identify the specific orders that qualified for premium pay, and separately itemize premium pay when compensating drivers.

The ordinance also prohibits food delivery network companies from retaliating against drivers for exercising their rights under the law, and from: (i) reducing or modifying service areas in Seattle, (ii) reducing drivers’ compensation, (iii) limiting drivers’ earning capacity, including by restricting drivers’ access to online orders, and (iv) charging customers additional fees for grocery deliveries, if the ordinance is a “motivating factor” in the decision.

Finally, the ordinance requires food delivery network companies to provide drivers with written notice of their rights under the law.

Covered businesses are obligated to provide premium pay for the duration of the coronavirus civil emergency. And covered businesses must maintain records documenting their compliance with the ordinance for three years.

Drivers are entitled to lodge a complaint with the Seattle Office of Labor Standards (“OLS”) or file a civil action in court, in order to enforce the ordinance. Businesses that violate the ordinance will be subject to various penalties and fines, and payment of unpaid compensation owed under the law, liquidated damages, and attorneys’ fees and costs.

The Gig Worker Paid Sick and Safe Time Ordinance

Under the Gig Worker Paid Sick and Safe Time Ordinance, which will go into effect July 13, 2020, covered transportation network and food delivery network companies will be obligated to temporarily provide paid sick and safe time benefits to ride-share and food delivery drivers, notwithstanding the drivers’ independent contractor status. More specifically, covered drivers will earn one day of paid leave for every 30 calendar days that they work in whole or in part in Seattle, dating back to October 1, 2019, or the commencement of their engagement (whichever is later), and continuing through 180 days after certain civil emergency orders relating to the coronavirus pandemic have been terminated.

Drivers will have the right to use paid sick and safe time benefits in 24-hour increments for various reasons, including, among others: (i) to accommodate their need for medical diagnosis, care, or treatment, (ii) to care for a family member with a mental or physical illness, injury, or health condition, and (iii) when a covered business has reduced, suspended, or otherwise discontinued operations for any health or safety related reason. For each day of leave, drivers will be entitled to their “average daily compensation” (which includes any bonuses, commissions, and tips) from their highest earning calendar month since October 1, 2019.

Covered businesses will also be required to provide drivers with written notice of their rights, and of the businesses’ relevant policies and procedures for meeting the requirements of the ordinance. In addition, covered businesses will be prohibited from retaliating against drivers for exercising their rights under the law. Covered business will also be required to maintain records documenting their compliance with the ordinance for three years.

The OLS will enforce the ordinance, and drivers will have the right to lodge a complaint with the OLS, or file a civil action in court, if they believe their rights under the ordinance have been violated. Businesses that violate the ordinance will be subject to various penalties and fines, and payment of unpaid compensation owed under the law, liquidated damages, and attorneys’ fees and costs.

Takeaways

Although the requirements imposed by both Seattle ordinances are temporary, covered businesses will almost certainly need to make changes to their operations in the short-term. Businesses that engage independent contractors should also bear in mind that state and local governments in other jurisdictions may ultimately adopt legislation with similar objectives (particularly if the coronavirus pandemic continues to grow).

This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2020 Epstein Becker & Green, P.C.

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Societe Generale to buy gig worker fintech Shine

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The information you need to start your day, from PaymentsSource and around the web:

Lights on

Societe Generale has agreed to buy Shine, a French challenger bank that offers financial services for contractors and entrepreneurs.

The price is about $112 million, reports TechCrunch, adding Shine’s bundle includes a business account, debit card and business services like invoicing and accounting. Shine launched in 2018 and has about 70,000 consumers.

Shine will operate independently and its products will be sold to the bank’s business clients. SocGen is interested in expanding relationships with companies that are migrating to a full online model.

Searching for eyewear

Alphabet has acquired North, a Canadian firm that makes smart glasses, suggesting Google is getting ready to move beyond its own Google Glass eyewear. The price of the deal was not disclosed, though The Globe and Mail reports it was about $180 million.

Google Glass, which includes a camera, web access and functions such as the ability to read QR codes, launched earlier in the 2010s. It did not take off with consumers because of its price and unclear use case.

Google still offers Google Glass to businesses, and its announcement said North would contribute to Google’s ambient computing strategy, referring to a migration away from traditional computing devices to wearables and IoT.

Cross-border hub

MFS Africa has acquired digital payments firm Beyonic, boosting a menu of payment services for small to mid-sized businesses.

MFS operates an interoperable payments hub across Africa covering 200 million mobile wallets through an API. Beyonic specializes in payment support, collections and front-end business services, reports Finextra.

Terms of the deal were not disclosed, and it’s still subject to regulatory approval in Tanzania.

In transit

Smart city venture O-CITY has joined Visa Ready for Transit, which will boost O-CITY’s addressable market to hundreds of transit systems globally.

O-CITY is a division of BPC, and uses a SaaS model to quickly update transit networks to support open digital ticketing, moving transit away from closed loop ticketing systems that are unusable outside of the networks.

Transit ridership has suffered during the coronavirus lockdowns, though open loop and contactless technology is expected to play a role in bringing commuters back.

From the Web

Fintech start-up TransferWise is set to launch an investments feature
CNBC | Tue June 30, 2020
Financial technology firm TransferWise plans to launch a service that lets users of the account invest passively in investment funds from third-party providers.

US challenger bank Chime launches Credit Builder, a credit card that works more like debit
TECHCRUNCH | Tue June 30, 2020
With the Chime Credit Builder Visa Credit Card, users can control how much they want to spend by transferring funds from a “Spending Account” to their Credit Builder Secured Account, and can then charge up to this amount wherever Visa is accepted.

BART Makes Mobile App Parking Payments Available Systemwide
NBC BAY AREA | Tue June 30, 2020
BART announced Monday that the option to pay for parking at its stations through the agency’s official smartphone app will now be available at all stations throughout the system.

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