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Trudeau says feds will create EI-like benefit for gig, contract workers

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OTTAWA — The federal government plans to move as many out-of-work Canadians into the employment insurance system when a key emergency benefit runs out in the fall, and provide an EI-like support for millions who can’t qualify under existing rules.

OTTAWA — The federal government plans to move as many out-of-work Canadians into the employment insurance system when a key emergency benefit runs out in the fall, and provide an EI-like support for millions who can’t qualify under existing rules.

The change signals a potentially sweeping overhaul to the decades-old social safety net criticized in recent years for not keeping up with a modern labour force marked by increasing contract and gig work.

It was partly because of those holes that the government created the $80-billion Canada Emergency Response Benefit at the start of the pandemic, which is set to wind down over the coming weeks.

Those who already qualify for EI will be moved to that program.

The government is promising a parallel, transitional benefit with EI-like components for those who can’t yet — “and I emphasize yet,” said Employment Minister Carla Qualtrough — get into the EI system. It will include access to training and the ability to work more hours without having as steep a clawback in benefit payments.

The government is also promising to relax EI eligibility rules like the number of hours required to receive support payments.

Speaking Friday morning, Prime Minister Justin Trudeau said the goal is to move everyone receiving CERB to employment insurance, and cover anyone looking for work “with a better, 21st-century EI system.”

Details will be rolled out in the coming weeks.

The government’s most recent CERB figures show $62.75 billion in benefits to 8.46 million people. About half of those recipients have gone to EI-eligible workers.

Those eye-popping numbers were the reason the EI system was shelved in favour of the CERB in March, as federal officials worried the volume of claims would overwhelm the decades-old system.

The government is still expecting millions to be on EI come the fall — about four million, Qualtrough said, adding that the system has been tested and was ready to handle the deluge upon its restart.

“We believe that the CERB has served its purpose and the reason it was created is no longer the main focus of our efforts as a government to support workers,” Qualtrough said during a mid-afternoon press conference.

“We are going to move on to something different.”

The Liberals are hoping the change prods more Canadians to either go back to work or look for a job as the economy moves into what the Bank of Canada has described as a recuperation period before a long, bumpy recovery.

The recuperation appears to have started in May when the economy grew by 4.5 per cent, Statistics Canada reported Friday, re-emerging from severe lockdowns in March and April. That figure beat expectations, and a further sign of optimism was a preliminary estimate of five per cent growth in June, which will be finalized next month.

The national data agency said rebounds in May were seen across multiple industries, including retail trade registered that saw its largest monthly increase since comparable readings began in 1961.

“May’s GDP numbers demonstrate that our economy is rebounding from all-time lows, but the growth numbers we’re seeing simply represent businesses reopening after needed lockdowns,” said Trevin Stratton, chief economist at the Canadian Chamber of Commerce.

Despite the two months of growth after two months of negative readings, Statistics Canada’s preliminary estimate is that economic output contracted by 12 per cent in the second quarter compared to the first three months of 2020, which would be a historic drop.

Statistics Canada said economic activity still remained 15 per cent below pre-pandemic level despite the gains over May.

Recouping the remaining percentage points will take months, if not longer. Much will rest on how many companies may yet close, how many jobs disappear with them.

“It’s a question of uncertainty at this point and how much damage the shutdowns have done,” said Benjamin Reitzes, BMO’s director of Canadian rates and macro strategist.

“We don’t really have that much information at this point, but if you consider the number of small businesses that are under significant pressure, maybe not surviving this period and the scarring broadly on the economy from things like that … it’s going to take time to recover from that.”

The federal government also announced Friday that it is extending a commercial rent-relief program through August as a lifeline to many small businesses whose revenues, while slowly returning, still lag behind their fixed costs.

So far the program has helped about 63,000 small business tenants through forgivable federal loans totalling $613 million. It is well below what the government hoped when it rolled out the aid.

The Canadian Federation of Independent Business said the announcement is good news for those who can access the program, but called it a “slap in the face” for those whose landlords refuse to apply.

The organization called on the federal government to allow tenants to apply directly for help.

“Rent relief needs an overhaul now,” said Laura Jones, CFIB’s executive vice-president. 

This report by The Canadian Press was first published July 31, 2020.

Jordan Press, The Canadian Press









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Workers

Big jump in unemployment benefit claims from gig workers

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Buried in the details of the Labor Department’s weekly unemployment claims Thursday morning was a significant jump in the number of gig workers filing for jobless benefits, up more than 48% to nearly 424,000.

Gig workers can apply for temporary Pandemic Unemployment Assistance which is specifically for “self-employed, independent contractors, and others who are unemployed as a direct result of COVID-19, who are not eligible for regular unemployment benefits or extended UI benefits,” according to the U.S. Department of Labor.

One person grateful for the extra cash is Joy Chowdhury. He’s an Uber driver in New York City, and when the pandemic shut down most businesses in the city, he was in a bind.

“I was struggling to pay my rent,” he said.

That changed when Congress passed the first COVID-19 relief package.

“It did help me” once he could get unemployment benefits, Chowdhury said. “I’m going to appreciate that opportunity as a gig worker.”

This latest spike in pandemic unemployment claims is likely linked to the brief lapse in the program before the last aid package was approved, new shutdowns, and to the after-holiday slowdown, according to Dmitri Koustas an economist at the University of Chicago. 

Since about a third of the labor force does some work in the gig economy, Koustas said.

“If more people are relying on gig work, a lot of the risk is on the workers themselves.”

That’s because “we’ve attached a whole bunch of rights and privileges and opportunities to employment,” according to Erin Hatton, a sociologist at the University at Buffalo.

Privileges like retirement plans, parental leave, health insurance and unemployment insurance are tied to traditional full-time jobs.

And Heidi Shierholz, a labor economist at the Economic Policy Institute, said that was problematic before, but with the pandemic, “it’s really shown us that there are gaps in our regular unemployment system that you can drive a truck through. We do have the ability to close them, like the existence of this program shows us that we can do it.”

Josh Godfrey in Houston knows this well. His works for DoorDash, and his earnings dropped from $600 to $150 a week during the pandemic.

Without the temporary gig unemployment benefits, Godfrey doesn’t know what he would have done. And now he’s making plans.

“The pandemic kind of pushed me to kind of reevaluate what I’m doing in life and make steps towards getting a more stable job that I won’t lose due to market volatility.”

So he’s going back to school.

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Q&A: Expanding talent management strategies to embrace the gig workforce

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Digital information concept AI-powered, person-centric platforms can help connect the dots between people, work and life to drive smarter decisions, navigate choice and create impactful experiences. (Image: Shutterstock)

The gig economy has been a steadily growing force in talent management for a number of years. But the disruption to the economy and the workforce caused by the COVID-19 pandemic has had many employers rethinking their business and talent management strategies in the past few months, and the switch to a work-from-home model also opened the eyes of many businesses to the possibilities beyond the traditional work arrangement.

Related: Uber CEO proposes new category of employment for gig workers

 

Colin Brennan Colin Brennan, president, Global Solutions & Services, Alight Solutions

Colin Brennan, president of global solutions & services at Alight Solutions, recently shared some thoughts on the increasing role of the gig economy in traditional business models, and what employers can do to attract and leverage talent.

Why is gig work a critical capability for employers to accommodate, and how has the pandemic played a role in shaping this?

The pandemic displaced many highly skilled workers who turned to “gigs” while waiting for the economy and job market to improve. When the pandemic subsides, we’ll see a dramatic redistribution of talent across industries, and these workers will join employers that will likely still be establishing the right resources and technology infrastructure to support a workforce that’s returning to the workplace, remaining remote, or a combination of both.

But gig work is hardly a new phenomenon, as the economy has been reorganizing itself around freelancers and independent contractors for many years. What the pandemic did was force employers to reimagine their businesses and workplaces so they’re more adaptable and resilient in the face of disruption. In situations like these, gig workers give employers the flexibility to scale their workforce up and down based on the demand for goods and services and the skillsets that are needed to deliver them. Jobs that can be performed on an on-demand basis will be a huge part of employers’ talent management strategies moving forward.

How can employers leverage cloud-based HR systems to unify organizations’ people-related data and processes, especially when it comes to effectively managing gig workers?

Employers should be focused on being proactive, fast and lean, especially when it comes to operations. In order to meet the needs of a contemporary, agile workforce, they should evolve their approaches to pay and talent while implementing the right systems. Traditionally, HR systems are not made to effectively manage gig workers — especially when it comes to rapid onboarding and offboarding. As gig workers play an increasingly important role in their operations, employers need nimble processes that run in a paperless fashion during the recruitment and application stages; glean workers’ past employment experiences; leverage mobile as a channel to bring people into the organization and keep them engaged; and help make data-driven decisions around skillsets.

As a result of the pandemic, HR leaders hesitant towards automation may finally make the switch due to the positive correlation with cost and time savings. Cloud-based HR systems can unify employers’ people-related data and processes. By providing a broader view of the workforce, employers can strategically allocate resources, hire the right people at the right times, start programs that nurture talent and, ultimately, elevate the employee experience.

What’s the advantage of offering gig workers diverse options for pay, and what kind of options exist?

In this digital age where information, goods and services are accessible from mobile devices and transactions are seamless, workers expect the same level of convenience when it comes to compensation. That’s why it’s critical for employers using the gig model to ensure quick and stress-free methods of payment for those workers, on their channel of choice.

With more people digitizing their wallets using mobile pay and banking apps, employers should find payroll solutions that can fit seamlessly into that experience. Fortunately, many employers are adopting new processes and technologies — and they’re already “paying” off. They can calculate compensation as time-related data is collected, allowing for more frequent payments that go directly to workers’ digital wallets, much like Apple Pay or Alipay. Alight’s DailyPay on-demand payroll service, for example, allows workers to transfer accrued but unpaid wages to any bank account or pay card in advance of their next paycheck.

Specific to gig workers, they generally expect to be paid for the work they do, as it’s completed, rather than on a typical pay period cycle. This growing trend only adds to the need for employers to have faster and more efficient methods of conducting payroll. That’s where AI and machine learning come in — those technologies can take all the important inputs (e.g., salary, commissions, taxes, travel, expenses, bonuses, etc.) as well as years of historical payroll data, to more accurately assess whether a worker’s paycheck is correct or not.

In addition to pay, are there other benefits employers should consider offering when it comes to attracting the gig workforce and creating a great gig experience?

Employers that can provide engaging experiences that will cultivate gig workers and their skills will be in an advantageous position. While the actions taken and administered will be different, providing additional HR administrative services such as benefits will allow employers to attract and retain the best possible extended workforce.

In today’s experience economy, workers expect to have valuable data and information at their fingertips that can be applied seamlessly across their digitally-driven lives. We believe improving health outcomes and maximizing benefits dollars starts with empowering people to take charge of their total wellbeing with on-demand support from their employers.

AI-powered, person-centric platforms can help connect the dots between people, work and life to drive smarter decisions, navigate choice and create impactful experiences. Consider the possibilities for the workforce if employers use AI to optimize workforce management, pay people faster, provide them with personalized and customized retirement and financial solutions, or even anticipate their healthcare needs, like using biometric data to nudge them to seek care before health issues arise.

 

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How does DoorDash work? Everything to know about the food delivery app powered by gig workers

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  • DoorDash is an on-demand food delivery service that lets you order food and drinks from restaurants in your area.
  • When you order from DoorDash, your food is delivered by a freelance worker who doesn’t belong to any single restaurant.
  • Since restaurants don’t have to hire delivery drivers, DoorDash makes it easier for them to expand their delivery business.

DoorDash is an on-demand food delivery service that partners with local restaurants to deliver food to homes and businesses. However, due to the way that DoorDash orders are delivered, the app makes it easier for restaurants to get into the delivery business.

How DoorDash works

DoorDash operates in hundreds of cities, offering hyperlocal food delivery across the US. The company works with restaurants, letter them set menu prices, but controlling delivery and service fees themselves.

How does DoorDash work? Everything to know about the food delivery app powered by gig workers
DoorDash hosts a variety of different restaurants.Dave Johnson/Business Insider

The biggest difference between DoorDash and other apps is that orders placed through DoorDash don’t make restaurants use their own delivery drivers. Instead, DoorDash has its own fleet of freelance delivery workers – they’re called Dashers – who are paid through tips, a base salary from DoorDash, and by completing “challenges.”
This makes it easier for restaurants to start a delivery business, since they don’t have to hire their own delivery workers.

In the past, DoorDash would take some of their drivers’ tips – they claim this is no longer the case. The company’s been involved in other lawsuits regarding the alleged mistreatment of their workers.

Restaurants have to pay DoorDash to use their drivers and receive orders through the app. Depending on the specific relationship that a restaurant establishes with DoorDash, the restaurant may pay DoorDash a monthly fee, a flat fee per order, or a commission based on how much money they make.

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These fees are used to pay Dashers, perform background checks on these Dashers, process credit card transactions, pay for advertising and marketing, and more.

DoorDash gives restaurants a choice about how they offer their delivery services. Storefront, for example, is a service that DoorDash offers that lets customers order from the restaurant’s website, not just the app. DoorDash Drive is built for big orders, like catering platters, and lets restaurant handpick Dashers to help them make those large deliveries. And DoorDash also allows restaurants to rely on the app exclusively for all deliveries.
For restaurant owners who want it, DoorDash also offers data analytics to help restaurants better understand their business and work more efficiently, as well as standalone tools like a net profit calculator for delivery sales. The DoorDash Merchant Portal lets restaurants track sales, adjust the menu, and track metrics like total sales, average order size, and most popular menu items.

How does DoorDash work? Everything to know about the food delivery app powered by gig workers
DoorDash offers a suite of services to help merchants run their business more efficiently.Dave Johnson/Business Insider

For customers, DoorDash has obvious value: it enables fast ordering and delivery for restaurants across the local area. Using the DoorDash website or mobile app, you can search for local restaurants, browse the menu freely, and track the order as the driver picks it up and brings it to you.

Not every restaurant offers their entire menu on DoorDash, however – the restaurant gets to choose their online menu. And since they don’t manage their own delivery drivers, any issues you have with delivery will likely need to be taken up with DoorDash, not the restaurant.

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