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Biden allies demand help for gig workers

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Activists are urging Joe Biden to turn his focus to a recovery plan for the gig economy, saying there’s a moral and political imperative to help Americans who rely on short-term, on-demand contract jobs for their livelihoods.

Why it matters: “You’re missing voters that would be aligned with Biden,” said María Teresa Kumar, CEO of Voto Latino, who’s engaged the Biden campaign on this. “It’s not just young voters — it’s millions of African American and Latino voters that if you mention they’re part of this economy, it’d go a long way.”

  • A poll from UnidosUS found 41% of Latinos participate in the gig economy.

The big picture: The coronavirus has exacerbated the already tenuous nature of gig-economy jobs, laying bare a fragile situation for millions. Today’s gig workers often lack constants including guaranteed wages, health care, vacation time, child care, family leave, financial assistance or mental health services.

  • “Many of those who do gig work are also financially vulnerable,” said UnidosUS’s Eric Rodriguez. “There’s something wrong with the picture when large numbers of people are having to work numerous gig jobs per month and still struggle to get by.”
  • AirBnB, the home-renting platform, has suffered billions of dollars in cancellations as travelers are staying home.
  • In May, Uber reported its biggest quarterly loss in three quarters, a whopping $2.9 billion as folks decided they weren’t comfortable riding in someone else’s car during this time.
  • If ride-share use declines because restaurants and bars are closed, or people aren’t commuting to the office, drivers simply earn less and have to scramble to find other work.

Between the lines: The work-from-home experimentation forced by the pandemic also could spur a larger-scale challenge for the next administration.

  • A recent article in the Harvard Business Review says the gig economy’s growth until now was largely due to the addition of unskilled delivery, driving and errand jobs. Organizational barriers prevented gig jobs from taking off in “knowledge-based” fields like engineering, consulting and management.
  • The coronavirus forced tests of off-site connectivity, productivity and quality control, though, and now “many firms will be attracted by the prospects of the direct and indirect cost savings that the gig economy model seems to offer.”
  • While Biden has rolled out a broader “Build Back Better” economy recovery agenda, he hasn’t yet dedicated speeches or policy rollouts specifically to the gig economy.

Senior Biden policy adviser Stef Feldman told Axios that the campaign views their economic agenda “as a unified effort to help working Americans.”

  • “Gig workers are an important part of that,” she said. “Non-gig workers are as well.”

Biden has advocated to extend the right to organize and bargain collectively to independent contractors, ensure they have a safe place to work with fair pay, and make health care accessible to them, whether through their employer or the Affordable Care Act.

  • Biden and running mate Kamala Harris have proposed establishing a federal standard modeled on the ABC test, which employers must pass to classify a worker as an independent contractor instead of an employee.
  • Biden and Harris also have supported the California gig-economy law known as AB5 that was passed last year to classify contractors as employees, giving them access to various pay and benefit protections. But the law has become mired in controversy, with state lawmakers months later still signing off on exemptions.

The other side, via Axios’ Alayna Treene: Trump administration officials argue that gig economy workers benefit from its policies to help businesses, such as pushing for liability protections from COVID lawsuits. But the Labor Department also has issued policies that made it harder for gig economy workers to collect unemployment benefits.

  • And last month, the Trump campaign sided with Uber and Lyft in a debate in California over whether the companies should classify their drivers as employees with full benefits. It argued that state law limits opportunities for gig workers by forcing them to be employees instead of independent contractors.
  • “The American worker, including those in the gig economy, has no bigger advocate than this President and unlike those in the radical left he will not regulate them out of business,” said White House spokesman Judd Deere.

What they’re saying: Carlos Ramos, a 39-year-old Lyft driver who’s an organizer with Gig Workers Rising, a driver-led advocacy group in California, told Axios that he and others in his gig community are supportive of Biden but would welcome a conversation specifically about Latino gig workers.

  • “These policies put into place right now are disproportionately affecting people of color and it’s always good to give a good assessment of what’s going on,” Ramos said.
  • “The worst possible case scenario is that nobody addresses this and 10 years from now we’re having the same conversation, the same fight, but we will be too far behind. There will be too many of these companies, they’ll be too big, too influential, and there will be nothing we can do.”

Go deeper:

DoorDash CEO: Biden’s calls to make gig economy workers employees go against their wishes

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Why California Prop 22 Is A Vote On The Gig Economy

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Proposition 22 is, essentially, a special law just for app-based companies like Uber, Lyft, Postmates, Instacart, and DoorDash. Under Prop 22, they would not be subject to the existing laws around employee classification. This exemption would essentially create a lesser class of employees who are deprived of the full workers’ protections and benefits that other employers have to provide.

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Gig economy: California Appellate Court affirms Uber and Lyft must reclassify California drivers as employees

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By Jack Schaedel and Jamin Xu, Firm:  FordHarrison

Uber and Lyft will be required to reclassify drivers and riders previously considered independent contractors as employees following a ruling from a California appeal court affirming the preliminary injunction that imposed this obligation on 10 August 2020.

On 22 October 2020, a California appellate court affirmed a preliminary injunction requiring Uber and Lyft to reclassify California drivers from independent contractors to employees and to comply with the California Labor Code, the Unemployment Insurance Code, and the Industrial Welfare Commission wage orders, as requested by California State Attorney General Xavier Becerra and the City Attorneys of Los Angeles, San Francisco, and San Diego. A further discussion of that original 10 August 2020 San Francisco Superior Court’s original 33-page decision can be found here.

Summary of the Order

The appellate court unanimously sided with the Superior Court in holding that the State and city governments are ultimately likely to succeed on the merits in arguing that Uber’s and Lyft’s drivers are employees, not independent contractors, under the rigorous ABC test set forth under California Assembly Bill 5 (‘AB 5’).

AB 5, which took effect at the beginning of 2020, codified the test to determine whether a worker can be classified as an independent contractor set forth under the California Supreme Court case Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903, which presumes workers are employees unless an employer can establish three factors:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Click here https://theword.iuslaboris.com/hrlaw/insights/us-worker-or-independent-contractor-californias-new-test for a full discussion of Dynamex.

Because Dynamex was issued over two years ago, the Court reasoned that companies like Uber and Lyft, who utilise independent contractors as a significant portion of their workforce, have had significant time to contemplate how they can proceed with reclassifying workers as employees. Therefore, the Court reasoned that requiring Uber and Lyft to comply with the preliminary injunction would not result in irreparable harm. On the contrary, the court specifically affirmed the trial court’s reasoning that:

‘rectifying the various forms of irreparable harm shown by the People more strongly serves the public interest than protecting Uber, Lyft, their shareholders, and all of those who have come to rely on the advantages on online ride-sharing delivered by a business model that does not provide employment benefits to drivers.’

Therefore, the Court required Uber and Lyft to comply with the San Francisco Superior Court’s preliminary injunction order beginning 30 days after the Court issues its forthcoming remittitur of the appeal.

Likely impact and Proposition 22

Although the legislature has recently enacted exemptions for certain types of workers, including certain writers, musicians and artists, as well as individuals providing certain ‘professional services,’ from the AB 5 test (see here), this most recent decision signifies that under the current ABC test, Uber’s and Lyft’s drivers are unlikely to be able to remain as independent contractors, in the absence of subsequent intervention from the legislature or the passage of Proposition 22 on California’s ballot initiative this November (see here for details of Proposition 22).

However, employers should keep in mind that even the passage of Proposition 22 is unlikely to provide their specific businesses with exemptions from AB 5, as it is intended to apply specifically to ride-hailing companies so that their drivers can be classified as independent contractors in exchange for increased worker protections such as guarantees in minimum earnings, expense reimbursements, healthcare subsidies and insurance coverage for on the-job injuries.

Furthermore, this decision signifies that a government enforcement action brought by the state and local governments of California will be able to seek compliance with AB 5 through the use of preliminary injunctions even at the early stages of a lawsuit, while the case is ongoing.

If a preliminary injunction is granted, employers could find themselves having to provide workers, on very short notice, all benefits commonly associated with non-exempt employees in California, including minimum and overtime wages, meal and rest period premiums, reimbursements for business expenses, sick leave, workers’ compensation coverage, unemployment insurance, paid family and sick leave, and wage replacement programs like disability insurance. Employers could also find themselves having to pay taxes and penalties on very short notice.

Additionally, even if Proposition 22 or any other legislative exemptions pass in the near future, their effects are unlikely to be retroactive. Therefore, entities who use independent contractors may continue to be exposed to legal liability through government enforcement mechanisms and/or class and representative Private Attorneys General Act (‘PAGA’) actions.

Businesses utilising independent contractors are advised to continue to track legal developments and consult with experienced labour and employment counsel to evaluate the continuing viability of this classification for their specific business.

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Cardinal Nation happy for Tony La Russa’s new gig

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ST. LOUIS – Former Cardinals skipper Tony La Russa is returning to manage the Chicago White Sox. La Russa and World Series wins are no strangers here in St. Louis.

Cardinals broadcaster Mike Claiborne, a La Russa friend, believes the Hall-of-Famer will do well in Chicago.

“He’s got a good team to work with; some good young talent. They need a little leadership,” he said.

The White Sox and Cardinals are expected to meet in interleague play next season.

“Everybody wanted to see Tony do well,” Claiborne said. “And I want to see him do well, except when he plays the Cardinals.”

Claiborne said he texted Tony and congratulated him. Tony replied: “It should be fun.”

At Ballpark Village, there was well-wishes from fans.

“He’s a good guy,” said Armando Sierra. “He’s done good for baseball and for him to get another chance, why not?”

La Russa, 76, managed the Cardinals from 1996 to 2011.

“You’re never too old; you’re never too old,” Sierra said. “That’s just a number.”

Down the street at the Midwestern, more well wishes from Cardinal supporters who believe La Russa will get a warm welcome when the White Sox play at Busch Stadium.

“Probably get the reaction that (David) Freese got when he came back; everybody cheered for him,” said Cardinals fan John Pizzitola.

Claiborne added: “Warm would be an understatement. It will be seismic for sure.”

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