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Freelancers, gig workers express fear that a Biden presidency will put them out of work | National

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(The Center Square) – Millions of freelance workers in the U.S. are worried that a Biden presidency might put them out of business because of his support for the Protecting the Right to Organize (PRO) Act and opposition to Proposition 22, which is on the ballot this election.

The PRO Act would implement similar measures to California’s AB-5 law, which forced millions of independent contractors out of work and prompted lawsuits by the rideshare companies Lyft and Uber.

According to a recent Upwork survey, Freelance Forward 2020, there are 59 million workers in the U.S. who work as contract employees, filing income taxes as 1099 employees instead of W-2 employees.

AB-5, which went into effect Jan. 1, requires every worker in California to be a W-2 employee unless the employer can meet the standards of a rigorous “ABC test” stipulated by the law.

The B part of the test states that to be considered an independent contractor, “a worker must perform work that is outside of the usual course of business for the hiring company – making it harder or impossible for many freelancers to work for clients in their own industry. Similar measures have been considered in other states, including New York and New Jersey, so far unsuccessfully,” according to a CNBC news report.

This month, a California Appeals Court heard legal arguments from Uber and Lyft, who challenged the law requiring them to reclassify their drivers as employees, or leave California altogether.

On Nov. 3, California’s registered voters will vote on Proposition 22, a ballot measure that would overturn AB-5. Proposition 22 classifies rideshare drivers as independent contractors (1099), not employees or agents of a company (W-2).

Democratic presidential candidate Joe Biden publicly opposed Prop 22, tweeting, “Last year California passed #AB5, affording gig workers protections and benefits like a minimum wage and overtime pay. Now, gig economy giants are trying to gut the law and exempt their workers. It’s unacceptable. I urge Californians to vote no on the initiative this November.”

According to his campaign plan, the Biden Plan for Strengthening Worker Organizing, Collective Bargaining and Unions, Biden states that if elected, he would ″aggressively pursue employers who violate labor laws, participate in wage theft, or cheat on their taxes by intentionally misclassifying employees as independent contractors.”

″As president, Biden will put a stop to employers intentionally misclassifying their employees as independent contractors,” the campaign website states. “He will enact legislation that makes worker misclassification a substantive violation of law under all federal labor, employment, and tax laws with additional penalties beyond those imposed for other violations. And, he will build on efforts by the Obama-Biden Administration to drive an aggressive, all-hands-on-deck enforcement effort that will dramatically reduce worker misclassification.”

A coalition of Instacart, DoorDash, Lyft, Uber and Postmates has spent more than $184 million to promote the passage of Proposition 22. The California Chamber of Commerce, California Police Chiefs Association, and the California NAACP have all expressed support for Prop 22.

Union groups representing roughly 55,000 workers, Gig Workers Rising, We Drive Progress, Mobile Workers United, Rideshare Drivers United, and the Service Employees International Union oppose Prop 22.

“Big Labor and the forced unionism-supporting politicians they back detest Uber, Lyft and other such companies simply because their drivers are independent contractors and are not vulnerable under federal law to union monopoly bargaining, and being forced to pay union dues as a job condition,” Mark Mix, president of the National Right to Work Committee, told The Center Square.

“AB5, California’s attempt to give union bosses these powers over freelancers, has been disastrous and has led to massive layoffs, so much so that Golden State politicians ultimately concluded they had no choice but to exempt journalists and many other kinds of workers from its radical provisions,” Mix adds. “Despite the devastating consequences AB5 has had in California, Biden and those that support the so-called PRO-Act seek to apply AB5 and its job-destroying impact nationwide.”

Biden supports the PRO Act, which would weaken right-to-work laws in states that allow employees to opt out of joining a union and paying union dues. The law also authorizes the federal National Labor Relations Board to fine companies that retaliate against workers who organize collective bargaining rights activities.

Biden’s campaign website states that, once elected, he “will direct the U.S. Department of Labor to engage in meaningful, collaborative enforcement partnerships, including with the National Labor Relations Board (NLRB), the Equal Employment Opportunity Commission, the Internal Revenue Service, the Justice Department, and state tax, unemployment insurance, and labor agencies.

“And, while Trump has weakened enforcement by sabotaging the enforcement agencies and slashing their investigator corps, Biden will fund a dramatic increase in the number of investigators in labor and employment enforcement agencies to facilitate a large anti-misclassification effort.”

Rafael Espinal, executive director of the Freelancers Union, told CNBC, “Those who are aware of the negative impacts of AB-5 in California are extremely concerned about what the next presidency can mean for their industry.”

Mix adds that “The Biden-backed ‘PRO-Act’ is a laundry list of long sought-after and new union boss powers over rank-and-file workers, over businesses and over the entire American economy, whose signature provision is wiping out by federal fiat all 27 state Right to Work laws so millions more workers could be forced to fund a union or be fired.

“Other provisions of the so-called PRO-Act include authorizing the federal Labor Board to overturn secret ballot votes in order to impose unionization on workers on the basis of the coercive card check process, empowering federal bureaucrats to impose contracts on private businesses and their workers, and reclassifying millions of independent contractors so they could be unionized against their will,” he says.

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Egypt to register millions of gig workers for state insurance, aid | Business , Regional

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Gig workers need fair deal in our ‘convenience’ economy

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COMMENT | In a simpler age, there was only one number to remember for food deliveries. Helpfully, there was a jingle that was repeated often on the few radio stations that operated back then. There were fewer digits in the telephone number itself which made it fit better in a melodic hook that was only a few seconds long (though I can’t recall hearing a Malay version of tujuh-lima-lima…).

You had the option of ordering various pizzas, garlic bread, or simple pasta dishes, which were a huge treat back then, what more the novelty of having it delivered directly to your front gate.

Of course, today food deliveries are common. Some are still operated by the restaurants, but usually, they are available through popular food delivery apps, which are the bedrock of the convenience economy.

Consumers are now able to get access to food, goods, and services whenever, wherever, and however they like, made possible by hundreds of thousands of people zigging and zagging their way across cities.

Like many things, the pandemic and multiple lockdowns have sped up the widespread adoption of delivery services by businesses and customers, but it was already a growing trend before that.

It made sense. Why spend time travelling, parking, and all that hassle waiting for food elsewhere, when you can just make a few taps and continue being in the comfort of your own home? There are also a huge number of promotions and deals giving you discounts on your orders, while earning you points for more deals in the future. It’s not a difficult choice to make, and this was pre-Covid-19.

Once the virus was in the picture, staying home was not only the…

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How to decide if a gig economy worker is an employee or self-employed? Guidance from UK Supreme Court’s decision in landmark Uber case

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Introduction

In recent years, the advance in technology and shifting economic conditions have contributed to the emergence and rise of “gig economy”. Gig economy refers to on-demand, peer or platform economy. It often involves a business model where individuals take up on-demand jobs or gig works through digital platforms such as a smartphone application or website. Popular examples of such applications in Hong Kong include Uber and Deliveroo.

While gig workers are often viewed as “self-employed persons” or “independent contractors” in many jurisdictions and are unable to enjoy protections under labour law, a recent UK Supreme Court decision classified Uber drivers as “workers” and ruled that they are entitled to minimum wage, paid leave and other legal protection. Although the services provided by Uber has been ruled illegal in Hong Kong, the case sheds light on the classifications of gig workers in general.

UK Supreme Court ruling

In Uber BV and Others (Appellants) v Aslam and others (Respondents) [2021] UKSC 5, the UK Supreme Court explored the employment status of private hire vehicle drivers who provide their services through the Uber application. The UK employment law distinguishes three categories of persons who enjoy varying degrees of labour protection, including: 

  1. those employed under a contract of employment (which is akin to the concept of “employees” under Hong Kong employment law); 
  2. those self-employed people who are in business on their own account and undertake work for their clients (which is similar to the concept of “independent contractors” under Hong Kong employment law); and 
  3. those “workers” in an intermediate class who are self-employed but provide their services as part of a profession or business undertaking carried on by someone else, who tend to have some characteristics of both of the above categories (but there is no such intermediate category of “workers” under Hong Kong employment law). 

The Supreme Court’s findings 

The Supreme Court considered the purpose of the relevant statutory provisions, which is to offer protection to those people who are in a subordinate and dependent position in relation to the employer and are vulnerable to exploitation.

In determining the status of Uber drivers, the Supreme Court took into account a number of facts found by the labour tribunal which point towards to the relative degree of control exercised by Uber over their drivers. These findings of facts include (1) Uber being able to fix the remuneration paid to drivers, (2) the contractual terms on which drivers perform their services are dictated by Uber, (3) once drivers logged onto the Uber application, their choice of accepting requests for rides is restricted by Uber, (4) Uber exerts significant control over how drivers deliver their services by various methods including vetting the types of cars, suggesting routes and using rating systems for managing performance and terminating relationship with drivers, as well as (5) restricting communication between passengers and drivers to prevent drivers from establishing any relationship beyond am individual ride. 

On the basis of the labour tribunal’s findings of facts, the Supreme Court ruled that Uber exerted tight control on the drivers and the services provided. The drivers were in a position of subordination and dependency in relation to Uber such that the drivers had little or no ability to improve their economic position through professional or entrepreneurial skill. In practice, the only way the drivers can increase their earnings was by working longer hours while constantly meeting Uber’s measures of performance. The Supreme Court found that the drivers were rightly found as “workers” under UK employment law.

Classification in Hong Kong

In Hong Kong, an individual may perform work as an “employee” or an “independent contractor”. As per the Court of Final Appeal’s decision in the leading case of Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951, the modern approach to the question of whether one person was another’s employee is to examine all the features of their relationship against the background of the indicia developed in the case law with a view to deciding whether, as a matter of overall impression, the relationship was one of employment. The following indicia of employment, albeit not exhaustive, will be likely be considered by the court to decide whether there is an employer-employee between the parties:

  • the degree of control exercised by the employer; 
  • who provided the equipment for performing the services; 
  • whether the individual may hire additional helpers for performing the services;  
  • the degree of financial risk taken by the parties; 
  • the degree of responsibility for investment and management of the parties; and 
  • whether and how far the individual had an opportunity of profiting from sound management in the performance of his or her tasks. 

Although the classifications adopted by the English and Hong Kong Courts are not identical, and it seems that in Hong Kong there is a higher threshold for individuals to be entitled to protections under its employment law as “employees”, the case still sheds light on the possibility that the Hong Kong Court may reach an overall impression that gig workers such as Uber drivers are not independent contractors given the significant degree of control that the business has over the gig workers, which is an important factor that Hong Kong Courts would consider when determining whether an employer-employee relationship exists

At the same time, there have been calls on the Hong Kong Government to address the emergence and rise of gig economy and review the existing labour legislation to enhance protection of labour rights of gig workers. However, the Hong Kong Government has stated that it has no plan to expand the scope of the current employment legislation to cover selfemployed persons

Takeaways

For companies which adopt business models involving the provision of services by gig workers, it is imperative to consider the classification of such gig workers from an early stage and seek professional advice on the issue if needed. Whether an individual is classified as an “employee” or an “independent contractor” will have significant impact in terms of the statutory benefits enjoyed by the individual and the statutory duties and obligations imposed on employers, which may in turn affect the financial planning, risk management and business viability of the companies. 

 

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