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Gig Economy Giants Uber and Lyft Face California Lawsuit

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Gig Economy Giants Uber and Lyft Face California Lawsuit

Gig Economy Giants Uber and Lyft Face California Lawsuit

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Gig Economy giants Uber and Lyft are being sued by the state of California for allegedly failing to meet the requirements of California Assembly Bill 5 (AB 5).

The Complaint, filed by attorneys from the Office of the California Attorney General and the city attorney offices of Los Angeles, San Diego and San Francisco “accuses Uber and Lyft of depriving workers of benefits, such as a minimum wage, health care, overtime pay, reimbursement for business-related expenses, access to disability insurance and paid sick leave.” according to a post by Forbes.

The lawsuit seeks restitution in unpaid wages for drivers as well as action from the companies to treat their drivers as employees moving forward. According to a post by the LA Times, “The law enables plaintiffs to seek up to $2,500 in civil penalties per violation for drivers going back four years.”

AB 5 went into effect January 2020, and requires employers to treat contract workers like employees, unless they meet certain requirements.

The bill effectively expands the definition of the word employee: “…a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business.”

Earlier this year, Instacart faced an injunction from the city of San Diego to stop it from classifying thousands of its grocery packaging and delivery workers as independent contractors. While the injunction only covers San Diego, the writing appears to be on the wall for Gig Economy, as the state of California lawsuit against Uber and Lyft now shows.

The trucking industry is also facing challenges in complying with AB 5, as there has been confusion on how the law applies to trucking companies that carry out business with owner-operator truck drivers.

One of the biggest impacts all employers in the state of California must face in the wake of AB 5 is the requirement for offering employee benefits to these new employees, including the requirements of providing healthcare coverage under the ACA.

While the IRS uses a different test than California for determining independent contractor status. It is unclear how the IRS will be able to differentiate between the state and federal standards with respect to ACA reporting. For workers that are reclassified as employees under AB 5, prudent employers should account for tracking hours of services, wages, and other employee level details for ACA compliance and reporting purposes, as required by the Employer Shared Responsibility Provisions, also known as the Employer Mandate.

Under the ACA Employer Mandate, organizations with 50 or more full-time employees and full-time equivalent employees are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties. The healthcare law defines full-time employees as workers who average 30 hours of work a week or 130 hours a month.

Employers will need to incorporate these newly classified employees into their ACA compliance process. Employers will need to extend offers of health insurance coverage to more employees, and reporting requirements will grow in complexity. The volume of forms to be processed will increase, along with the costs associated with distributing 1095-C Forms to employees and submitting required ACA information to the IRS annually.

Failing to get this right can result in penalty assessments from the IRS. The agency is currently issuing ACA non-compliance penalty notices in Letter 226J for the 2017 tax year. Employers should seek out expert ACA compliance consultants to prepare for increased ACA compliance as more independent contractors become full-time employees under the ACA.

To learn more about ACA compliance in 2020, click here.


For any questions or a consultation on the ACA or IRS Letter 226J, contact Gregg Kasubuchi of Trusaic at (213) 355-5108 or at gkasubuchi@trusaic.com.

Short URL of this page: https://acatimes.com/fiu



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Seattle Enacts Gig Worker Paid Sick And Safe Time Ordinance During COVID-19 Crisis | Jackson Lewis P.C.

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The Seattle City Council has enacted the Paid Sick and Safe Time for Gig Workers Ordinance, which temporarily provides paid sick and safe time (PSST) to “gig workers” for online-based food delivery network companies and drivers of transportation network companies with 250 or more gig workers worldwide. The ordinance takes effect July 13, 2020, and ends 180 days after either (1) the termination of the Mayor’s civil emergency, or (2) the termination of any concurrent civil emergency applicable to Seattle that is proclaimed by a public official in response to COVID-19, whichever is later. However, the law’s other legal requirements, such as recordkeeping, will stay in effect for three years.

This law applies to all such gig workers who had a work-related stop in Seattle at least once in the 90 calendar days before requesting to use PSST. These gig workers may use PSST in 24-hour increments for any reason covered by the ordinance, including:

(1) caring for themselves or a family member for a physical or mental health condition, including a doctor’s appointment;

(2) caring for themselves, a family member, or a household member for reasons related to domestic violence, sexual assault, or stalking;

(3) when their family member’s school or place of care has been closed; and

(4) if the company reduces, suspends, or discontinues operations for health or safety related reasons.

The ordinance will require covered entities to pay a gig worker his or her “average daily compensation,” which is based on each day worked for the covered entity during the highest earning calendar month since October 1, 2019, or since the commencement of work for the company, whichever date is latest.

There are two options to calculate accrual of PSST. First, covered entities can provide gig workers one day of PSST for every 30 calendar days worked in whole or in part in Seattle since October 1, 2019, or upon starting the gig, whichever is later. Alternatively, covered entities can simply provide five days of PSST to gig workers starting on the ordinance’s effective date and let them start accruing one day of PSST for every 30 calendar days going forward.

In certain circumstances, hiring entities may be able to request reasonable verification from the gig worker after three consecutive days of PSST.

Covered entities must create a written PSST policy and provide at least monthly notification of the gig worker’s average daily compensation, and the accrued, used, and available PSST.

This law creates a private right of action for violations of the ordinance. Prevailing gig workers can recover treble (3x) economic damages, interest, a monetary penalty for retaliation, and reasonable attorney fees and costs.  Gig workers can also bring actions on a class basis and obtain equitable relief.

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Gig workers face shifting roles, competition in pandemic

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NEW YORK — There were the two-hour, unpaid waits outside supermarkets when San Francisco first started to lock down, on top of the heavy shopping bags that had to be lugged up countless flights of stairs.

And yet even after signing up for several apps, 39-year-old Saori Okawa still wasn’t making as much money delivering meals and groceries as she did driving for ride-hailing giant Uber before the pandemic struck.

“I started to juggle three apps to make ends meet,” said Okawa, who recently reduced her work hours after receiving unemployment benefits. “It was really hard, because at that time, I could not afford to stay home because I had to pay rent.”

Okawa is one of an estimated 1.5 million so-called gig workers who make a living driving people to airports, picking out produce at grocery stores or providing childcare for working parents. Theirs had already been a precarious situation, largely without safeguards such as minimum wage, unemployment insurance, workers compensation and health and safety protections.

But with the pandemic pummeling the global economy and U.S. unemployment reaching heights not seen since the Great Depression, gig workers are clamoring for jobs that often pay less while facing stiff competition from a crush of newly unemployed workers also attempting to patch together a livelihood – all while trying to avoid contracting the coronavirus themselves.

U.S. unemployment fell to 11.1% in June, a Depression-era level that, while lower than last month, could worsen after a surge in coronavirus cases has led states to close restaurants and bars.

Marisa Martin, a law school student in California, turned to Instacart when a state government summer job as paralegal fell through after a hiring freeze. She said she enjoys the flexibility of choosing her own hours but hopes not to have to turn to gig work in the future. The pay is too volatile — with tips varying wildly and work sometimes slow — to be worth the risk of exposure to the virus.

“We are not getting paid nearly enough when we’re on the front lines interacting with multiple people daily,” said Martin, 24, who moved in with her parents temporarily to save money.

Alexandra Lopez-Djurovic, 26, was a full-time nanny in a New York City suburb when one of the parents she works for lost her job while the other saw his hours cut.

“All of a sudden, as much as they want me to stay, they can’t afford to pay me,” she said. Her own hours were reduced to about eight per week.

To make up lost wages, Lopez-Djurovic placed an ad offering grocery delivery on a local Facebook group. Overnight, she got 50 responses.

Lopez-Djurovic charges $30 an hour and coordinates shopping lists over email, offering perks the app companies don’t such as checking the milk’s expiration date before choosing which size to buy. Still, it doesn’t replace the salary she lost.

“One week I might have seven, eight, 10 families I was shopping for,” Lopez-Djurovic said. “I had a week when I had no money. That’s definitely a challenge.”

Upwork, a website that connects skilled freelance workers with jobs, has seen a 50% increase in signups by both workers and employers since the pandemic began, including spikes in jobs related to ecommerce and customer service, said Adam Ozimek, chief economist at Upwork.

“When you need to make big changes fast, a flexible workforce helps you,” he said.

Maya Pinto, a researcher at the National Employment Law Project, said temporary and contract work grew during Great Recession and she expects that many workers will seek such jobs again amid the current crisis.

But increased reliance on temporary and contract work will have negative implications on job quality and security because it “is a way of saving costs and shifting risk onto the worker,” Pinto said.

It’s difficult to assess the overall picture of the gig economy during the pandemic since some parts are expanding while others are contracting. Grocery delivery giant Instacart, for instance, has brought on 300,000 new contracted shoppers since March, more than doubling its workforce to 500,000. Meanwhile, Uber’s business fell 80% in April compared with last year while Lyft’s tumbled 75% in the same period.

For food delivery apps, it’s been a mixed bag. Although they are getting a bump from restaurants offering more takeout options, those gains are being offset by the restaurant industry’s overall decline during the pandemic.

Gig workers are also jockeying for those jobs from all fronts. DoorDash launched an initiative to help out-of-work restaurant workers sign up for delivery work. Uber’s food delivery service, Uber Eats, grew 53% in the first quarter and around 200,000 people have signed up for the app per month since March — about 50% more than usual.

“Drivers are definitely exploring other options, but the issue is that there’s 20 or 30 million people looking for work right now,” said Harry Campbell, founder of The Rideshare Guy. “Sometimes I joke all you need is a pulse and a car to get approved. But what that means is it’s easy for other people to get approved too, so you have to compete for shifts.”

Delivery jobs typically pay less than ride-hailing jobs. Single mom Luz Laguna used to earn about $25 in a half-hour driving passengers to Los Angeles International Airport. When those trips evaporated, Laguna began delivering meals through Uber Eats, working longer hours but making less cash. The base pay is around $6 per delivery, and most people tip around $2, she said. To avoid shelling out more for childcare, she sometimes brings her 3-year-old son along on deliveries.

“This is our only way out right now,” Laguna said. “It’s hard managing, but that’s the only job that I can be able to perform as a single mother.”

Other drivers find it makes more sense to stay home and collect unemployment — a benefit they and other gig workers hadn’t qualified for before the pandemic. They are also eligible to receive an additional $600 weekly check from the federal government, a benefit that became available to workers who lost their jobs during the pandemic. Taken together, that’s more than what many ride-hailing drivers were making before the pandemic, Campbell said.

But that $600 benefit will expire at the end of July, and the $2 trillion government relief package that extended unemployment benefits to gig workers expires at the end of the year.

“So many drivers are going to have to sit down and decide, do I want to put myself at risk and my family at risk once I’m not getting the government assistance?” Campbell said.

______

Follow @cbussewitz and @Alexolson99 on Twitter

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GIG and Enso set their sights on ‘ambitious’ 1GW solar and storage pipeline

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Macquarie’s Green Investment Group (GIG) and Enso Energy have signed a joint venture, targeting 1GW of subsidy-free solar capacity across England and Wales.

The companies say they have identified the initial projects that will form their “ambitious pipeline” of solar and battery storage sites, all of which have are already grid secured and are being submitted for planning approval.

According to GIG and Enso Energy, the subsidy-free developments will be backed by power purchase agreements (PPAs).

Ian Harding and Andrew King, co-founders of Enso Energy said the partnership with GIG brought together two organisations with “the same vision, to dramatically accelerate the delivery of the benefits of low-cost solar energy to communities up and down the country”.

Solar Media’s head of research Finlay Colville said: “Our in-house market research team came across Enso and Macquarie’s UK solar plans back in April this year. Currently, we are showing ten sites – all nominally at the 50MW-dc level – at early stages, within our monthly pipeline analysis on UK solar. Activity appears to be all pre-application at the moment, with planning seemingly confined to screening and scoping at the local level, and spread mainly in the South East/West of England.

“To put this into context, it is worth recalling that there is currently a pipeline of pre-build large-scale solar sites in the UK well above 8GW, that has evolved since the end of incentives back in 2017. Of this, about 5GW is at pre-application stages of screening and scoping, inclusive of the initial 500MW of Enso/Macquarie activity. However, there is a further 3GW-plus that has gone into full application either waiting for approval or having been approved. Screening/scoping is a low-cost effort; the real money enters the game when full planning applications for 50MW solar farms get into the planning portal.”

The sites will take advantage of newly available tracking and bifacial solar technology, helping to maximise the amount of energy they can produce whilst minimising their footprint.

Battery storage will allow the projects not only produce more flexible electricity output, but also provide auxiliary services and stability to the grid.

Edward Northam, head of Green Investment Group Europe, pointed to the company’s origins in the UK as the “world’s first green investment bank” to highlight all it brings to the project.

“The UK’s solar market holds huge potential to create green jobs and help the UK get closer to its aim of becoming a net zero economy. By combining GIG’s deep technical and financial capabilities with Enso’s highly experienced development team, our partnership has the skills and expertise to unlock that potential, bringing low-cost, low-carbon power to communities right across the UK.”

GIG has supported 7.5GW of renewable projects in the UK, in particular through corporate PPAs. Enso Energy – previously known as Green Frog Development – has 1,500MW of distributed generation in the UK, predominantly gas-powered balancing plants.

Colville continues: “Macquarie’s alignment with Enso is interesting also, mainly owning to Enso being a newish entrant to large-scale UK solar farm planning. The strategy of the companies is therefore something that will be interesting to monitor going forward. Macquarie could certainly have chosen to enter the pre-build/planning phase in a different way, acquiring shovel-ready activity from the host of experienced pure-play solar developers that dominate the current 3GW-plus of sites that have had planning submitted.

“The success of companies that have sought to invest at such an early stage is mixed within the UK solar industry. A few have been highly successful, most notably BP Lightsource, Bluefield and ib Vogt, as examples of companies whose early-stage investments were driven by retaining ownership through and beyond the build-phase. Many others however have not been successful, reflecting the fact that pre-build application is a skillset in its own right, justifying the role of the greenfield pre-build flip model of developer.”

In December 2019, BP Lightsource heralded the return of large-scale solar build-out in the UK, revealing it is pursuing a 1GW project pipeline in its home market. As of last November, the company had deployed over 2GW of solar projects globally.

Similarly, Bluefield Solar Income Fund was reportedly looking to “exciting” new investments at the end of last year, predicting subsidy-free solar in the UK to gain momentum.

“One recalls the grand plans of Scatec years ago trying to get into the UK solar market that highlighted the need to have a partner locally that could deliver on planning success,” Colville finishes. “In an interesting twist, fellow Norwegian operated Statkraft recently announced its plans to enter UK solar at the pre-build phase. Similar to Macquarie, Statkraft has also chosen the domestic-partnering route with a somewhat unproven entity in large-scale UK solar.

“Whether Macquarie or Statkraft will have success through this route is very much an unknown today; either way, each company has the cash and ambition to easily change tactics and move into pre-build shovel ready portfolio purchasing going forward. There will be no shortage of greenfield developers today, currently building up hundreds of MW of shovel-ready portfolios, more than happy to take a call from either of these companies going forward!”

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