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California’s gig worker battle reveals the abuses of precarious work in Canada too

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Much of the focus during and after election night in the United States has centred on Donald Trump’s refusal to concede defeat and the makeup of Congress.

Yet Nov. 3 also saw many states vote directly on specific policies. For progressives, the results of these contests were mixed.

Voters in some states opted to decriminalize drug, and Floridians voted to raise the state minimum wage to $15 per hour. However, in California, several ballot initiatives resulted in significant defeats for the left.

Chief among them was Proposition 22, which passed with 55.8 per cent of the vote.

This new law allows technology companies such as Uber and Lyft to continue to classify their gig workers as independent contractors rather than employees.

The back story

A coalition of Silicon Valley companies launched the “Yes on 22” ballot campaign in response to recent moves by both the judiciary and legislature in California to expand the legal definition of employment.

In the Dynamex case of 2018, the California Supreme Court clarified the legal test for determining an employment relationship. This test limited when an employer can classify a worker as an independent contractor to instances where:

  1. The worker is free to perform services without the control or direction of the company;

  2. The worker is performing tasks outside the company’s usual activities; and

  3. The worker is engaged in an independently established trade, occupation or business.

It was certain app-based companies could not meet these criteria.

The legislature then passed Assembly Bill 5 in January 2020, which included the above method for determining employment status and aimed to stop what is broadly considered to be the misclassification of app-based workers as independent contractors.

The state’s new broader interpretation of employment was meant to give app-based and other contract workers access to labour standards protections, such as the minimum wage, as well as other social benefits currently denied to them, such as unemployment insurance and workers compensation. However, the legislation did not grant gig workers the ability to form unions.

The Proposition 22 campaign

“Yes on 22” proved to be the most well-funded ballot initiative in California’s history. Tech companies spent well over US$200 million on advertising, political contributions and public relations firms’ services. The coalition opposed to Proposition 22, led by labour movement organizations, came nowhere near this total, managing to raise around $20 million.

Since 2018, tech companies had been publicly voicing their objections to the Dynamex decision and California’s Assembly Bill 5, with some threatening to leave California if Proposition 22 was unsuccessful. During the “Yes on 22” campaign, gig companies additionally engaged in highly questionable tactics, such as requiring both drivers and customers to indicate support for the ballot initiative before using the app.

So while Assembly Bill 5 is the law of the land for other employers, Proposition 22 exempts the tech giants by setting separate labour standards for app-based workers.

Consequences for tech workers

The companies argue that Proposition 22 will benefit workers by maintaining the supposed flexibility of app-based work while also providing new, modest benefits.

For example, Proposition 22 includes a provision ensuring workers receive 120 per cent of the state minimum wage in California. However, this calculation is only made on the basis of engaged driving time. Because much of gig work is spent waiting for jobs through the app, income insecurity will remain a considerable problem.

Two people hold up a sign decrying low wages for Uber drivers on a city street.
Protesters stop traffic outside Uber headquarters in May 2019 in San Francisco. Drivers for ride-hailing giants Uber and Lyft turned off their apps to protest what they say are declining wages as both companies rake in billions of dollars from investors.
(AP Photo/Eric Risberg)

Scholars at University of California, Berkeley’s Labor Center, estimate that under this arrangement ride share workers will earn an average of $5.64 per hour when time between rides and vehicle costs are factored in.

Other benefits included in Proposition 22 dealing with health care, workers compensation and insurance are all much weaker than the protections guaranteed by traditional employment.

Battles over app-based work in Canada

Conflicts over the employment status of app-based workers are not unique to California.

After its Ontario couriers voted to unionize with the Canadian Union of Postal Workers, Foodora appealed the union certification and argued that couriers are independent contracts not entitled to unionize.




Read more:
Despite Foodora ruling, app-based workers face uphill union battle


The company then pulled out of Ontario altogether after the Ontario Labour Relations Board ruled in the union’s favour.

Before this decision, Foodora left Australia after that country’s Fair Work Ombudsman alleged that the company was misclassifying and underpaying its drivers.

A Foodora courier with a food order on his back pushes his bicycle along a snowy street.
A Foodora courier picks up an order for delivery from a restaurant in Toronto in February 2020, shortly after the company pulled out of Ontario due to an unfavourable Labour Relations Board decision.
THE CANADIAN PRESS/Nathan Denette

Uber also faces mounting pressure in Canada following a recent Supreme Court of Canada decision allowing workers in Ontario to pursue a possible class-action lawsuit to obtain protections such as a minimum wage, vacation and overtime pay, as well as other benefits entitled to them under the Employment Standards Act.

At the federal level, the Liberal government has amended the Canada Labour Code to include a “reverse onus clause” requiring federally regulated employers to prove that contractors they engage are properly classified.

Perhaps learning from outcomes in these other jurisdictions, the drafters of Proposition 22 included within the new law a rule requiring seven-eighths of the California legislature to vote in favour of any future modification. The victors of the California ballot initiative have now indicated their plan to pursue similar measures across the United States.

What’s driving the growth in app-based work?

Clearly app-based companies are committed to maintaining the “independent contractor” status of their workforce. This is largely because their business model involves competing on the basis of low labour costs achieved through skirting regulations that apply to competitors, such as traditional taxi companies.

Another University of California, Berkeley, Labor Center study estimates that between 2014 and 2019, Uber and Lyft alone avoided paying as much as $413 million in unpaid wages, overtime pay, unemployment insurance contributions and other taxes in the U.S.

However, some contend that there are much deeper forces at play. Economic historian Aaron Benanav argues that as manufacturing employment has declined and the service sector has grown, under-employment and precarious work have become endemic features of contemporary labour markets.

According to this theory, stubbornly slow growth rates, low productivity growth and depressed demand for labour are translating into a lack of good quality jobs.

Battles over employment classification and labour regulation, while important for improving app-based workers’ immediate conditions of work, ultimately won’t address the underlying dynamics contributing to the growth of gig work and other forms of precarious employment.

More fundamental reforms are needed to generate secure, well-compensated employment. Investment and job creation led by the public sector will be vital to addressing these issues in the future.

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Ruling in arbitration case bad news for gig workers – Massachusetts Lawyers Weekly

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A recent decision from the 1st U.S. Circuit Court of Appeals found that a housecleaner who claimed her employer had misclassified her as an independent contractor couldn’t sue because she was bound by a “clickwrap” mandatory arbitration agreement.

The plaintiff in Emmanuel v. Handy Technologies, Inc. had submitted an application through the website of a company that assigns housecleaning jobs to workers and clicked a checkbox agreeing to its terms of use.

She subsequently used the company’s mobile app to accept an independent contractor agreement, which was required for her to be connected with customers.

The 15-section agreement included a mandatory arbitration clause in section 12. That portion was not visible unless the user scrolled down through the entire agreement.

The plaintiff performed between 10 to 20 cleaning jobs for the defendant but stopped working because of payment issues. She then brought a putative class action alleging that she and others had been misclassified as independent contractors in violation of the state Wage Act and the federal Fair Labor Standards Act.

When the defendant moved to compel arbitration, the plaintiff argued that she did not have sufficient notice of the arbitration clause to be bound by it.

But the 1st Circuit disagreed. Applying the standard set forth earlier this year by the Supreme Judicial Court in Kauders v. Uber Technologies, Inc., it concluded that an online contract had been formed because the plaintiff had “reasonable notice” of the terms and made a “reasonable manifestation of assent” to those terms.

The court acknowledged that only a portion of the agreement was immediately visible on the plaintiff’s phone screen, and that portion did not include the arbitration provision. But it took the position that it was sufficiently clear that “additional text further specifying the terms of the Agreement could be viewed by scrolling.”

In doing so, it specifically declined to read Kauders as holding that for a user to be bound by terms visible only through scrolling, he or she must be required to scroll through the full text of the agreement.

The problem with that reading is that it fails to take into account that workers like the plaintiff are largely unsophisticated, low-wage gig workers. They are encountering long, dense agreements like the one in Emmanuel on their phones, which makes thorough review next to impossible. Moreover, they are not in a position to negotiate over the terms of such an agreement.

In fact, in some ways, these workers are more similar to consumers facing “take it or leave it” arbitration provisions than traditional employees.

It’s unfortunate that decisions like this one gloss over that reality.

 

Massachusetts Lawyers Weekly’s Editorial Advisory Board provides knowledge and guidance for the editorials that appear on this page. The board is an advisory panel only, with no official voting or participation record. The input from the board is a tremendous resource to Lawyers Weekly; however, the editorials represent the position of the newspaper and its editorial staff, not the members, nor any given member, of the board. 

BOARD OF EDITORS: Robert J. Cordy, Boston; Sophia L. Hall, Boston; Martin W. Healy, Boston; Hon. Margaret R. Hinkle, Boston; Thomas M. Hoopes, Boston; Regina M. Hurley, Boston; Shiva Karimi, Boston; Hon. Rudolph Kass, Boston; Marsha V. Kazarosian, Haverhill; Andrea C. Kramer, Boston; Renee M. Landers, Boston; Richard L. Levine, Boston; Elizabeth N. Mulvey, Boston; Eric J. Parker, Boston; C. Max Perlman, Boston; Patricia M. Rapinchuk, Springfield; Martin R. Rosenthal, Boston; Jeffrey Sacks, Boston; Carol A. Starkey, Boston

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6 Ways Gig Workers Can Invest for Retirement | Business

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In 2021, you can contribute up to $13,500 if you’re under 50, or $16,500 if you’re 50 or older.

There’s no Roth option, so you’ll be taxed upon withdrawal. There’s also a steep penalty if you need to withdraw your SIMPLE IRA funds within two years of setting up the account: 25%, instead of the usual amount, on top of taxes.

As the employer, you’ll have to contribute to your SIMPLE IRA on your own behalf, as well as for any employee who’s earned at least $5,000 in at least two of the past five years and expects to earn at least that much for the current year. You’ll have to choose one of the following formulas:

  • Automatically contribute 2%.
  • Match 3% of contributions dollar for dollar.

Due to the lower limits and the extra layer of rules, a Solo 401(k) or SEP IRA is typically a better option for solo gig workers. However, if you expand and add others to the payroll, a SIMPLE IRA may be a good option.

6. Taxable Brokerage Account

If you’ve exhausted your other retirement savings options or you want the flexibility to invest with fewer rules, a plain old taxable brokerage account works. Since you won’t get any tax breaks for investing in a brokerage account, though, aim to max out your Roth IRA or traditional IRA contribution before you go this route.

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Meet Your Driver: Film, Gig Workers and Big Tech

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Kris Hitchen in Sorry We Missed You, courtesy of Zeitgeist Films

“When you walk into an Amazon fulfillment center, it’s like walking into the Chocolate Factory, and you won a Golden Ticket,” says Janelle, one of the employees featured in videos posted to Amazon’s YouTube page. The introductions share a format, with titles like “Meet Ricardo” and “Meet Ron, military veteran and Amazon Delivery Service Partner.” These documentary-style videos sometimes air as advertisements on streaming services. One of the people interviewed just had a baby. Another narrates in American Sign Language. Janelle talks about providing for her young son. She says he loves packages from “Mommy’s work.” He appears briefly in phone-shot footage, lifting a cumbersome delivery box with joy. 

These short videos give an inside look at the warehouses that facilitate the world’s largest online retailer. Sped-up footage of workers on the floor and driving forklifts accompanies Janelle’s narration. Dressed in safety vests, they snake through a maze of pallets, robots and conveyer belts, while boxes slide down spiral chutes. The concrete floors are clean, and the space looks vast and orderly. The workers in the background of the videos don’t look happy, but they don’t look unhappy, either. They just look like people at work.


In “Meet Kent,” another worker talks about his son and his son’s admiration for his job. “Every time he sees the blue Prime trucks,” Kent says, “He says, ’Daddy! There’s your people!’” Whether Janelle and Kent are real people and their commentary unscripted isn’t really the issue. The point of this video collection is to cast doubt on allegations that Amazon warehouse staff are exploited and to bury the reams of reporting that depict the workplace as a living nightmare.

It would be easier on Amazon if its customers imagined all of its operations were conducted by robots. But, as a company with more than a million employees, it’s impossible to hide the existence of the humans on the route from a click on a website to a cardboard box on a front door. This year, plenty of customers, newly working from home, have even had the chance to meet their Amazon delivery drivers. The idea of who might be considered a “tech worker” also has shifted, and a few recent films have explored the change.

In the past, stories about tech companies, like Douglas Coupland’s 1995 novel Microserfs and the HBO program Silicon Valley, which debuted in 2014, have zeroed in on young upstarts working under slightly older tech industry lions. Think of the software developer Ryan Phillippe plays in the 2001 movie, Antitrust, versus Tim Robbins’s Bill Gates-like CEO. Even the cult classic Hackers positions computing as a generational battle: The young punks wish to free digital technology from the corruption and avarice of corporate adults. But in 2021, the lower-level tech insider’s tale has begun to sound predictable. Plus, given the number of stories in recent years about bad behavior by “tech bros,” it’s harder to find a hero in the computer guy who just happens to be a little less senior than the other computer guy.

In contrast with the vulnerable warehouse and gig labor that powers these newly global empires, tech office culture has banausic stakes. As people like Janelle—and the workers in the background—have grown more visible, films have begun to represent their struggles with more honesty than Amazon’s video team would allow. Alex Rivera’s Sleep Dealer (debuting in 2008, years before the “gig economy” had a name) was early to diagnose the problem. His film features workers in Mexico remotely powering robot laborers across the border. A decade later, another brilliant film, Boots Riley’s 2018 Sorry to Bother You, featuring Amazon-like corporation WorryFree, exposes bottom-rung work life, as well as the fig leaves and Potemkin villages that such companies create to deflect media scrutiny. This year, Lapsis, directed by Noah Hutton, cleverly leads with characters in a fictional gig position—part Google Map photographer and Instacart shopper. They face exploitation, but in Amazon-style promotional videos, the CEO declares that sustainability and “doing the right thing” are the company’s ultimate objectives.

Sorry We Missed You, released in 2019, is a direct hit, told as only the director Ken Loach could. The film reveals how the everyday burdens of this line of work can destabilize an entire family. Amazon goes unnamed, but it’s strongly implied when Ricky finds a job delivering boxes of products people ordered off the internet. He’d rather starve than go “on the dole,” and his pride and need makes him an easy mark for the hiring supervisor at the warehouse. “You don’t work for us, you work with us,” he tells Ricky.

The strength of Paul Laverty’s script lies in the scenes set at home. Ricky’s job, the means to provide for his family, has torn them apart. His wife gives up her car so that he can afford a van. Seb, his bright teenage son, skips school and has brushes with the law. Shouting matches between the boy and his father make clear that they want the same thing—for Seb to flourish, for Ricky to have an easier life—but know the deck is stacked, so they take their rage out on each other. When Seb shouts that he doesn’t want to “end up like you” to his dad, Ricky is devastated. I thought of Janelle and Kent when I watched this scene. What they said about their children delighting over boxes and branded trucks feels like a calculated response to those who might have anguished kids like Seb. Amazon has a lot to sell. It’s the “everything store.” What it sells in the video propaganda campaign became clearer to me through Loach’s film: Get a job at Amazon, and your son will be proud of you.

But Janelle has more to say in the video, which was posted online last year. She highlights how people on her team wear masks and have plenty of hand sanitizer. Workers are “going home to babies,” Janelle says, “[and] to grandparents,” and Amazon is trying to keep them safe. Last year, there were regular outbreaks in warehouses across America, and tens of thousands of workers were infected. Alec MacGillis, in his book on Amazon, Fulfillment, published in March, reports that workers relied on rumors about COVID infections because the company refused to inform them when someone was out sick. That’s just last year. Over the company’s history, workers have been injured and have even died on the floors that look so tidy in these videos.

Amazon’s video output coincides with the new style of tech worker movies. In one of the first employee introductions, posted in 2017, “Amazon Area Manager, Day in the Life,” the workers—managers, but on the floor—mention where they went to school (“Virginia Tech with a business management degree”). It is a perfect illustration of the mangled trajectories of tech disruption and social mobility in America: Dropouts can be tech billionaire CEOs, while college graduates end up in Amazon warehouses, and anyway, the opportunities for those without degrees are minimal for everyone besides a privileged class of white people. As Amazon attempts to stage manage its most vulnerable workers, movies like Sorry We Missed You and Lapsis bring the reality of the job in focus.




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