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The budget might promise jobs, but it overlooks gig economy workers

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Source: Unsplash/ Kai Pilger.

Treasurer Josh Frydenberg promised a federal budget focused on “jobs, jobs, jobs”.

In one sense he didn’t disappoint. His budget speech mentioned jobs 37 times — an average of about once a minute.

“This budget is all about jobs,” he declared. But it wasn’t about all jobs.

While the budget devotes billions to getting unemployed Australians into traditional employment, it does little for those with diminishing opportunities to find work outside the ‘gig economy’, where they are effectively treated as subcontractors, not as employees with rights secured by the Fair Work Act.

The government’s $37 billion in subsidies for businesses include almost $4 billion for JobMaker subsidies (paying $200 a week for hiring a new employee aged 16-29, and $100 a week for an employee aged 30-35), and $1.2 billion for apprenticeships in advanced manufacturing.

There’s also $1 billion for businesses in the defence industry and $3 billion for infrastructure projects.

But largely missing from the government’s considerations are those in sectors hit hardest by the COVID-19 pandemic where jobs are increasingly precarious.

It is not just workers in ‘blue-collar’ jobs in hospitality and delivery that increasingly face few opportunities to find a secure, full-time job.

Casualised, part-time and freelance ‘gig’ work is also increasingly common in ‘white-collar’ industries such the media, the arts and higher education.

Rise of the gig economy

The term “gig economy” was coined in 2009, at the height of the global financial crisis, as scores of unemployed and underemployed workers picked up various odd jobs to cover their living expenses.

Journalist Tina Brown (a former editor of The New Yorker) described workers in the knowledge economy increasingly depending on “a bunch of free-floating projects, consultancies, and part-time bits and pieces” for work.

Brown predicted the gig economy was “the new face of the job market” for knowledge workers.

A decade on, it’s difficult to track the exact scale and shape of the gig economy — partly because terms such as ‘gig work’, ‘freelance work’, ‘flexible work’ and ‘digital platform work’ are used interchangeably.

Australian Bureau of Statistics numbers, for example, are often cited to show the proportion of “employees without paid leave entitlements” hasn’t risen greatly in the past two decades. But this doesn’t capture the insecurity of workers not counted as employees.

A 2016 report by the Grattan Institute estimated 0.5% of Australians used peer-to-peer work platforms once a month.

A 2019 national survey of 14,000 Australians found 13% of respondents had undertaken “digital platform work”, with 7% doing so (or seeking to do so) in the previous 12 months.

The five most common platforms used were Airtasker, Uber, Freelancer, UberEats and Deliveroo. The most common type of work was food delivery, followed by professional services work, maintenance and then writing or translation work. More than a quarter had done computer-based work only.

According to technology researchers writing in the Harvard Business Review: “The COVID-19 pandemic could well prove to be a pivotal point in the gigification of knowledge work, and many firms will be attracted by the prospects of the direct and indirect cost savings that the gig economy model seems to offer.”

Gig work during the pandemic

As a freelance writer and PhD candidate, I can relate. Through my paid work and own experience, I’ve seen how the COVID-19 crisis is affecting both blue- and white-collar workers.

Earlier this year, when the first wave of the pandemic hit, I was commissioned to write an article about the four major food delivery platforms in Australia (Uber Eats, Menulog, Deliveroo and DoorDash). It was supposed to be a comparison article aimed at potential customers, explaining which platform is best. But speaking to delivery drivers made it clear not a single one of these companies would guarantee their workers a minimum wage.

One of the gig workers I interviewed was Joseph, who was delivering food around Perth for UberEats. As the first restrictions kicked in, his work evaporated almost immediately.

He told me that one week he made $78 for 10 hours’ work — about $7.80 an hour, less than half the national minimum wage of $19.84 an hour. After fuel and vehicle costs, he estimated he cleared just $20.

All five delivery workers I interviewed said they had earned less than the national minimum wage at one time or another.

Joseph at least qualified for JobSeeker, but others were migrant workers with no right to welfare payments.

Being a white-collar gig worker

The irony of writing about gig workers such as Joseph who grapple with precarious work is that the article I was writing was itself gig work.

Over the past few years, I’ve worked regularly as a freelance journalist and copywriter for various publications and brands.

In a typical week, I’d spend Monday in an office writing listicles and advertorials for a website aimed at high school students. On a Tuesday I’d commission and edit articles for a travel website. For the remainder of the week, I’d pitch interviews and feature articles to publications.

I commuted to different offices and co-working spaces around Sydney, worked from my windowless bedroom or in nearby cafes.

I accepted just about every writing gig I could find, using all my own equipment, setting my own schedule and invoicing as a sole trader.

I took occasional cleaning and bar-tending jobs for extra cash.

Though I mostly enjoyed the work, it was challenging to stay on top of five or six different gigs simultaneously. I spent a lot of time chasing up late invoices and it was difficult to financially plan beyond paying my monthly rent.

Closing the loophole

Now, as a PhD student, I am contemplating how much the gig economy has encroached on academia. It has been estimated that up to 70% of teaching staff in some Australian universities were precariously employed, as casuals or on short-term contracts, before the pandemic.

These academics were naturally the first to lose their jobs, with the universities excluded from the federal government’s JobKeeper scheme.

If the government is “all about jobs”, it’s time to acknowledge the need for substantive reform to Australia’s industrial relations laws, to close the legal loopholes that allow businesses to exploit workers as non-employees.The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

NOW READ: Most of the 111,000 net new jobs created in August were in the gig economy: Is this a sign of what’s to come?

NOW READ: Delivery drivers in the gig economy are earning $10 an hour on average after costs: Survey

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Workers

Don’t Hire Gig Workers to Wait In Line for Your COVID-19 Test

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Over the weekend, a TikTok video went viral advertising a tip to bypass waiting in long lines for COVID-19 testing: hiring a gig worker to wait for you.

A now-deleted TikTok video from user @thetipguyNYC explains that viewers looking to hire someone else to wait for hours among possibly-infected people should use TaskRabbit, a platform for hiring people to do just about anything you don’t want to.  The video advises viewers to “filter by cheapest available” and to instruct the worker to give them a call when they’re at the front of the line. 

In a statement, TaskRabbit said it is aware of the practice of hiring workers to wait in line for COVID-19 tests, and that it’s fine with it. 

“The Wait in Line category has historically been popular during the holidays,” a TaskRabbit spokesperson told Motherboard. “This year, there are some Taskers choosing to wait in line for clients seeking COVID-19 tests.” They also added that “because details of all tasks are shared by clients in advance, Taskers know the types of lines in which they will be waiting, and the decision about whether to accept the task lies with the Tasker.”

One person who did this told Time Out that they couldn’t “fathom how people can disagree—it’s giving people jobs who may have lost theirs during this pandemic, so if they do it and get paid for it, that’s their decision.” They blamed access to testing and “the lack of organization” for the lines, adding that “people should absolutely be taking the opportunity to get paid for it.”

All of that conflicts with what’s actually going on, however. Some of the overcapacity is from a lack of adequately distributed resources, but another part is thanks to the hordes of people who are ignoring CDC guidelines and planning to travel for Thanksgiving

The pandemic has already led to an increase in demand for gig work (for example, food delivery) while exacerbating the divide between those who deliver and those who make the orders from behind phone screens at home. People need money in the middle of a massive employment crisis during a plague, but it doesn’t justify the exploitative work that has popped up in the gap in lieu of a competent and compassionate societal response.

Masses of out-of-work people standing in line for a COVID-19 test on behalf of wealthy people ignoring guidance that could end the pandemic isn’t any kind of solution, it’s a perfect example of why things got this bad to begin with. 



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Reconciling the Gig Economy in California: Changes to Worker Classification Laws Since AB 5 | Hanson Bridgett LLP

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Assembly Bill 5, (AB 5), signed by Governor Gavin Newsom in September of 2019, which went into effect on Jan. 1, 2020, codified the California Supreme Court’s landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles. Dynamex created the presumption that a worker is an employee rather than an independent contractor unless the hiring business can prove each prong of an ABC test, as follows:

(A) The person 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) The person performs work that is outside the usual course of the hiring entity’s business.

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

Though AB 5 outlined a number of exemptions, the law left many who previously relied on contractor work confused as to how to classify workers that would no longer be presumed independent contractors under the strict ABC test. Dissatisfaction with the new law quickly led to challenges at the Legislature, leading to the passage of AB 2257 and approval of Proposition 22 by voters this year.

AB 2257

AB 2257, drafted by the same author of AB 5, was signed into law by Governor Newsom on Sept.4, 2020. The bill primarily relates to creative work. Under AB 5, certain specified occupations and business relationships were exempted from the application of the ABC test. AB 2257 revised and recast these provisions substantially. The bill additionally specifically exempts certain occupations in creating, marketing, promoting, or distributing sound recordings or musical compositions. The law exempts a musician or musical group for the purpose of a single-engagement live performance event, and an individual performance artist presenting material that is their original work and creative in character, and the result of which depends primarily on the individual’s talent.

AB 2257 narrowed the professional services exemption for services provided by still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists. The bill establishes an exemption for services provided by still photographers, photojournalists, videographers, or photo editors (as defined under law) who work under a written contract that specifies certain terms, subject to prescribed restrictions. The bill also establishes an exemption for services provided to a digital content aggregator (as defined under law) by a still photographer, photojournalist, videographer, or photo editor, and establishes an exemption for services provided by a fine artist, freelance writer, translator, editor, content contributor, advisor, narrator, cartographer, producer, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the terms, subject to prescribed restrictions.

While the majority of the changes established by AB 2257 relate to creative work, the bill also created additional exemptions for certain other narrowly tailored professions and occupations, such as for people who provide underwriting inspections and other services for the insurance industry, manufactured housing salespersons, people engaged by an international exchange visitor program, consulting services, animal services, and competition judges with specialized skills. The bill also creates exceptions for licensed landscape architects, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators.

The bill revised the conditions under which business service providers providing services pursuant to contract to another business are exempt. The bill also revised the criteria under which referral agencies and service providers providing services to clients through referral agencies are exempt and revised the applicable definitions.

Finally, AB 2257 created an exemption for business-to-business relationships between two or more sole proprietors, and provides that a hiring entity need only satisfy all of the conditions of one of the exemption provisions to qualify for the exemption from the ABC Test.

With respect to enforcement, AB 2257 expanded the possibility of enforcement actions by authorizing any District Attorney to prosecute an action for injunctive relief, in addition to the Attorney General or any City Attorney authorized previously by AB 5.

Proposition 22

On Tuesday, Nov. 3, 2020, California voters overwhelmingly passed Proposition 22. Proposition 22, the most expensive initiative sponsored in California history, backed by Uber, Lyft, and Doordash, codifies the Protect App-Based Drivers and Services Act drafted in response to the restrictions passed under AB 5.

Many companies utilizing contractors have difficulty meeting the B-prong of the ABC test, and thus face significant misclassification risk. This is especially so in the gig economy, where contractors are used to perform work that a hiring entity is in the business of providing to end-customers. AB 5 provides little to no relief for employers within the gig economy, as none of the enumerated exemptions apply.

Proposition 22 is targeted to the gig economy and carves out a specific exemption from AB 5 for “app-based drivers” retained by “network companies.” The Proposition defines “app-based driver” as an individual who is a courier or driver for a company that maintains an online-enabled application or platform used to facilitate delivery services on an on-demand basis or to connect passengers with drivers using a personal vehicle. App-based drivers will be presumed independent contractors so long as a minimum standard is met:

  1. the network company does not unilaterally prescribe specific dates, times of day, or minimum hours during which the app-based driver must be logged into the platform,
  2. the network company does not require the app-based driver to accept any specific rideshare services or delivery service requests as a condition of maintaining access to the platform, and
  3. the network company does not restrict the app-based driver from working in any other lawful occupation or business. These requirements emulate the A-prong of the ABC Test and traditional jurisprudence on independent contractor classification.

Proposition 22 provides a number of legal employment benefits and protections that are required in California for workers classified as employees. For example, app-based drivers now have a guaranteed “net earnings floor” comprised of 120 percent of the applicable minimum wage of the worker’s “engaged time,” guaranteed tips and gratuities, and a guaranteed quarterly healthcare subsidy. For drivers that average 25 hours per week of engaged time during a calendar quarter, the subsidy will equal 82 percent of the average California Covered premium for each month. And for drivers who average between 15 and 25 hours, the subsidy will equal 41 percent of the average California Covered premium. Proposition 22 also requires the applicable companies to provide occupational accident insurance to cover at least $1 million in medical expenses and lost income resulting from injuries suffered while a driver is online, and disability payments of 66 percent of a driver’s average weekly earnings before the injuries suffered. Proposition 22 further requires the applicable company to provide accidental death insurance for the benefit of a driver’s spouse, children, or other dependents when the driver dies while using the app.

In addition to the employment-like pay benefits, Proposition 22 requires network companies to develop anti-discrimination and sexual harassment policies, and develop training programs for drivers related to driving, traffic, accident avoidance, and recognizing sexual assault and misconduct. The ballot measure also criminalizes the impersonation of an app-based driver as a misdemeanor.

Proposition 22 is most likely here to stay. The new law contains a provision which permits the Legislature to amend the law only with a statute passed in each house by seven-eighths of the membership. While a big win for gig economy companies using app-based drivers, Proposition 22’s reach is otherwise very limited. It only applies to companies that maintain an online-enabled application or platform used to facilitate delivery services on an on-demand basis, who also maintain a record of the amount of engaged time and miles accumulated by its couriers, or “transportation network companies” as defined in Public Utilities Code section 5431. i.e., a company operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using a personal vehicle. In other words, taxi or courier service companies that utilize an online platform to provide on-demand service are the only ones benefiting from the new law.

In sum, Proposition 22 creates a separate classification for app-based drivers. App-based drivers are thus no longer independent contractors or employees in the traditional sense, but rather a hybrid maintaining the independence traditionally enjoyed by contractors with some of the benefits and protections mandated for employees. The overwhelming support for this new classification in California could see ripple effects across the nation where app-based driving companies operate. Likewise, other industries that utilize an app-based model to provide services by contract workers to end-consumers may see value in developing similar legal exemptions for their gig workforce. Further changes to AB 5 or the expansion of Proposition 22-like legislation for other sectors are therefore expected while the law and the economy reconcile how to deal with the gig economy.

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Proposed Temporary Amendment To Facilitate Option-Based Awards To Gig Workers – Corporate/Commercial Law

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United States:

Proposed Temporary Amendment To Facilitate Option-Based Awards To Gig Workers


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The Securities and Exchange Commission released for comment
proposed rules that would apply on a temporary basis to allow for
broader reliance on Rule 701 and Form S-8 for stock-based
compensation related awards to gig or platform workers. These
workers may not be employees or consultants eligible to receive
stock-based awards under current Rule 701. The proposed rules would
amend Rule 701 by adding a temporary rule provision that, for five
years, would enable issuers to use Rule 701 to compensate certain
platform workers, subject to specified conditions. An issuer would
be able to use the exemption to issue its securities on a
compensatory basis to platform workers who, pursuant to a written
contract or agreement, provide bona fide services by means of an
internet-based platform or other widespread, technology-based
marketplace platform or system provided by the issuer. Under the
proposed amendments, these offerings would be able to be registered
using Form S-8. The amendments would be available on a temporary
basis in order to allow the SEC to assess whether there are any
unintended consequences. The proposal will be subject to a 60-day
public comment period.

See the SEC press release and fact sheet here, as well as the proposing release here.

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