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Gig Workers 1: Gig Economy Employment Issues – Employment and HR

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Introduction

‘Gig’ was a word mostly used in the entertainment
industry to express temporary/incidental employment. Gig economy
can be defined as the ex ante specified, paid tasks carried out by
independent contractor (or workers? or employees?) and is still
small but expected to grow. The growth has accelerated since
COVID-19 pandemic mostly via online platforms that mediate flexible
labor, so much so that “platform economy” has become a
common term as well. Most popular platforms are Uber, AirBnb,
Glovo, Deliveroo, TaskRabbit, Didi. Though it has been subject to
interest of scholars, unions and policymakers, there is not an
agreed conceptualization and uniform framework. 1

With this article series, we will try to shed some light on one
of the grey areas of gig economy: supply of the labor. Does the
supply of labor concern independent contractors or employees? Or
should a third category be considered for those work in gig
economy. Since certain boundaries could not be drawn when needed,
the policies and regulations have fallen behind court decisions.
 

Legal Debates, Most Recent Legislation and Court Decisions

Globally, the legal status of gig workers and question of
whether they should be classified as employees are the most heated
debates of gig economy. Because the result of such classification
will have direct effect on rights/obligations of workers e.g.,
minimum wage, health care, annual leave, overtime pay, retirement
plans, adherence to health and safety workplace requirements
etc.

While gig workers fight to be classified as employees, or at the
very least to benefit from same rights, gig economy entrepreneurs
stand firm against the idea justifying that main value of gig
economy lies with its independent agents2. Considering the
economic advantages they stand to gain if their workers are
classified as independent contractors, it is easy to emphasize with
their stand3.

However, such advantages bring together danger of worker
mistreatment. Regardless of what both sides claim, relationship of
subordination seems to be considered main criteria for
classification by courts. In this series of four articles, legal
status of gig workers in different jurisdiction regions will be
studied in the order below:

-California Labor Law, Especially AB5 and Uber initiative
Prop.22

-UK Supreme Court Decision Regarding Uber Drivers

-the EU Regulations and Developments in Turkey

California Legislation, AB5 and Uber

 According to U.S. employment law one can be either an
employee or an independent contractor, there is no in-between. The
distinction depends on the amount of control the employer has over
workers and if once classified as an employee, one can benefit from
protections projected by Fair Labor Standards Act, National Labor
Relations Act and Family and Medical Leave Act4.

On September 18, 2019 in California Assembly Bill 5 (“AB
5”) was passed. AB 5 seeks to apply labor law protections to a
wider group such as freelancers in gig economy. It establishes a
set of rules and those who pass these criteria are regarded as
employees, thus need protection and shall have rights same as
employees such as minimum wage, holidays, health care etc.

Proposition 22 (“Prop. 22”) was campaigned by UBER
with two other companies and passed with support of %58 of voters
in California last year. Prop. 22, also known as most expensive
campaign with 200 million dollars, states that UBER, Lyft and
Doordash are exempted from AB 5.

UBER, claiming that such approach would harm gig economy
businesses irrevocably, affect costs in customer level, wrote up a
proposition with Lyft and other companies in order to be exempted
from AB 5. They went as far as to threaten the voters with leaving
the country. A study in Australia shows that Uber could be right
about cost issue. The study examines a set of data and asks if
consumers would pay to improve worker’ conditions. The results
is a bit disappointing because while a significant proportion was
willing to more, most consumers prioritized price5.  The
approvement of Prop. 22 means that app-based drivers will be
treated as independent contractors rather than employees.

However, drivers and the Service Employees International Union
(“union”) filed a suit in the California Supreme Court
alleging that Prop. 22 was unconstitutional. California Supreme
Court denied the petition while stating a lower court lawsuit could
be filled. On February 11, 2021 the union filed a suit in Alameda
County Superior Court alleging that the gig-company founded ballot
measure violates state constitution, ignores worker rights.

What does it mean for employers in the U.S. and what should be
done?

We strongly believe capitalism should never have such a direct
effect on legal institutions especially when vulnerable group of
people, such as workers are at risk. Regardless of our opinion, it
is in employers’ best interests to be prepared for any and all
results of appeal decision. Such preparation should be mainly
consisted of finding common ground. We believe that could either
happen with providing certain rights for gig workers or asserting
less control over workers and giving way to freelancing as it was
intended in the very beginning.

Footnotes

1.
Conceptualizing the Gig Economy and Its Regulatory Problems; Nikos
Koutsimpogiorgos, Jaap van Slageren, Andrea M. Herrmann, and Koen
Frenken

2. The
gig economy in the UK: a regional persptective; Geraint Johnes;
Journal of Global Responsibility, Bol.10 No:3, 2019.

3.
Killing the Goose That Laid Golden Egg: Outdated Employment Laws
Are Destroying the Gig Economy; Emily C. Atmore, Minnesota Law
Review

4.
Accountability for Employers or Independence for Contractors?
Accomplishing AB5’s Labor Classification Goals in the Gig
Economy; Chelsea Rauch, Seattle University Law Review, Vol.
44)

5.
Consumer “app-etite” for worker’ rights in the
Australian 2gig2 economy; Brett Smith, Caleb Goods, Tom Barrett,
Alex Veen, Journal of Choice Modelling 38 (2021)

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Gig companies’ push for state-level worker laws faces divided labor movement

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By Tina Bellon

(Reuters) – Uber and other gig economy companies are trying a new approach to ending their battles with unions, and getting ahead of possible federal regulation that could upend their business based on classifying workers as independent contractors.

In New York, for example, gig economy companies are working with several unions including the Machinists and Transport Workers Union to strike a compromise that would allow drivers and food delivery workers to organize in a union and negotiate minimum pay and other benefits without being reclassified as employees.

With the support of the unions, the gig economy companies are pushing state lawmakers in Albany to pass a bill that would allow workers to negotiate wages and caps on company commission fees, and provide unemployment insurance in some circumstances.

Among the most vocal opponents of a proposed bill to achieve that goal is the Service Employees International Union’s (SEIU) northeastern Local 32BJ, which says the compromise would enshrine gig workers’ misclassified status and create a company-sanctioned union that would only further erode workers’ rights by setting no floor for the negotiations.

“This legislation moves workers backwards,” Kyle Bragg, 32BJ’s president said. “There’s too much company manipulation.”

Amid the controversy, efforts to have the bill introduced before the end of the state’s legislative session this week failed.

New York is just one of several states where gig economy companies led by Uber, Doordash, Lyft and Instacart are courting unions and state officials in an effort to cement their workers’ status as independent contractors across the United States.

FAULT LINES

The push by the gig economy companies has exposed divisions within organized labor over whether to bargain with the companies, or insist on workers being reclassified as employees with full protection of U.S. labor standards – and a clear legal right to join unions.

The rifts at times also run within the same union. For example, while 32BJ rejects the New York bill, SEIU President Mary Kay Henry in the past said she would back workers’ demands in reaching a deal with companies. The SEIU declined to comment for this story.

Similarly, the New York chapter of the AFL-CIO, the largest U.S. labor federation, backs the compromise proposal, while members of its Colorado chapter said they were opposed to bargaining agreements with the gig companies.

According to a Reuters review, the companies over the past few months set up lobbying groups in Massachusetts, New York, New Jersey, Illinois, Colorado and Washington to push for laws that declare app-based ride-hail and food delivery drivers independent contractors, while proposing to offer them some benefits. In some states the companies hope for buy-in from labor groups, company and union officials said.

The companies are trying to build on their success in California, where voters approved an industry-backed ballot measure that exempts ride-hail and food delivery workers from rules that require other types of contractors to be classified as employees, and provides them with limited benefits.

The companies say they pursue tailored policies for each state to combine flexibility for their mostly part-time workers with benefits and protections. They have yet to offer concrete proposals in most states.

Some executives hope state-based independent contractor laws can also forestall federal action by the labor-friendly Biden administration, which has vowed to end the misclassification of workers as independent contractors.

“The models that are developed at the state level can be given a framework at the federal level,” Lyft President John Zimmer said during an interview last month.

While any state law could be superseded by federal rules, Zimmer’s calculation assumes that the U.S. Labor Department is less likely to act once facts on the ground are established.

The companies’ race for state backing runs counter to the labor movement’s single biggest legislative priority, the passage of a far-reaching labor reform bill known as the PRO Act in Congress. The bill would make worker organizing easier and among other things reclassify most independent contractors as employees for the purpose of collective bargaining, though not for wage laws and benefits.

The bill is unlikely to pass the Republican-led U.S. Senate, but even if it did, several years of regulatory and court wrangling would ensue, a time during which gig workers’ rights would remain unchanged, said Wilma Liebman, former chair of the National Labor Relations Board.

SKEPTICS ON BOTH SIDES

Some union figures have therefore taken a more pragmatic approach. Andy Stern, former president of the SEIU and at the time one of the most politically influential labor leaders, for the past six years has been trying to strike deals between the gig companies and unions, including failed attempts in California to ward off the ballot measure.

The California referendum, a costly victory for the gig companies, was also a cautionary tale for unions, as well as for drivers, who are now left without any avenues to organize or object to the terms stipulated by the companies.

Stern said internal union surveys in New York had repeatedly shown that a majority of drivers did not want to be employees and said debates focused solely on reclassification were based on unrealistic and purist sentiments.

Stern instead advocates for drivers’ rights to organize in unions and negotiate their own contracts.

“Give a worker a union and collective bargaining and they’ll decide themselves what kind of status, wages and benefits they want. People who believe litigation and legislation are the solution have failed these workers,” Stern said.

Stern and others dubious of reclassification point to Seattle and New York City, where years of union efforts to organize drivers have led to the only driver minimum wage laws in the country.

Uber and Lyft have rocky histories with unions and workers who want to organize. The companies in 2015 enlisted the U.S. Chamber of Commerce for a years-long court battle against a Seattle law spearheaded by the Teamsters union that would have allowed ride-hail drivers to bargain collectively.

Uber more recently appears to have opened up to such agreements, however. The company last month recognized Britain’s GMB union as the collective bargaining unit of its 70,000 British drivers. Lyft’s Zimmer said the company was having constructive conversations with labor leaders.

Many union officials remain skeptical about basing workers’ fate on the goodwill of companies.

“You never get everything you want out of collective bargaining…and it would be better to give drivers more options and protections under the law,” said Kjersten Forseth, political and legislative director for the Colorado AFL-CIO, which plans to make state-based gig worker policy solutions its focus over the next two years.

(Reporting by Tina Bellon in Austin; Editing by Andrea Ricci)

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US Domestic News Roundup: Gig companies’ push for state-level worker laws faces divided labor movement; Former Virginia Governor McAuliffe wins Democratic primary in closely watched governor’s race and more

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Following is a summary of current US domestic news briefs.

Gig companies’ push for state-level worker laws faces divided labor movement

Uber and other gig economy companies are trying a new approach to ending their battles with unions, and getting ahead of possible federal regulation that could upend their business based on classifying workers as independent contractors. In New York, for example, gig economy companies are working with several unions including the Machinists and Transport Workers Union to strike a compromise that would allow drivers and food delivery workers to organize in a union and negotiate minimum pay and other benefits without being reclassified as employees.

Former Virginia Governor McAuliffe wins Democratic primary in closely watched governor’s race

Former Virginia Governor Terry McAuliffe easily won the Democratic nomination on Tuesday for the state’s gubernatorial election, securing his spot in a race that could signal where voters stand after the divisive 2020 presidential contest. McAuliffe, a 64-year-old moderate who served as governor from 2014 to 2018, was leading four other candidates, with more than 60 percent of the vote with 2,063 precincts of 2,584 reporting. Major news organizations projected him the winner shortly after polls closed at 7 p.m.

U.S. Senate passes sweeping bill to address China tech threat

The U.S. Senate voted 68-32 on Tuesday to approve a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology. An indignant China responded to the vote by saying it objected to being cast as an “imaginary” U.S. enemy.

U.S. pharmacist jailed for three years for tampering with COVID-19 vaccines

A Wisconsin pharmacist who pleaded guilty to trying to spoil hundreds of doses of Moderna’s COVID-19 vaccine because he was skeptical about them has been jailed for three years, the U.S. Justice Department said on Tuesay. Steven R. Brandenburg, 46, was also ordered to pay about $83,800 in compensation to the hospital at which he worked, according to a statement https://www.justice.gov/usao-edwi/pr/hospital-pharmacist-sentenced-attempt-spoil-hundreds-covid-vaccine-doses on Tuesday from the U.S. Attorney’s Office of the Eastern District of Wisconsin.

U.S. forming expert groups on safely lifting global travel restrictions

The Biden administration is forming expert working groups with Canada, Mexico, the European Union and the United Kingdom to determine how best to safely restart travel after 15 months of pandemic restrictions, a White House official said on Tuesday. Another U.S. official said the administration will not move quickly to lift orders that bar people from much of the world from entering the United States because of the time it will take for the groups to do their work. The White House informed airlines and others in the travel industry about the groups, the official said.

Senator Manchin unmoved by U.S. civil rights leaders’ voting rights push

Seven U.S. civil rights leaders met with Senator Joe Manchin to urge the Democrat to drop his opposition to a sweeping election reform bill backed by his party, but the West Virginian emerged from the virtual meeting unmoved. The bill is a Democratic response to a slew of measures making their way through Republican-controlled state legislatures, which voting-rights activists say would limit the ability of some voters to go to the polls.

U.S. to buy about 1.7 million courses of Merck’s COVID-19 treatment for $1.2 billion

Merck & Co Inc said on Wednesday the U.S. government has agreed to buy about 1.7 million courses of the company’s experimental COVID-19 treatment, molnupiravir, for about $1.2 billion, if it is authorized in the country. Molnupiravir is an experimental antiviral therapy Merck is developing with Ridgeback Biotherapeutics for the treatment of COVID-19 patients who are not hospitalized.

U.S. Vice President Harris pledges to visit U.S. southern border

U.S. Vice President Kamala Harris on Tuesday defended herself from Republican critics who criticized her for making her first international trip to Mexico and Guatemala instead of visiting the U.S. border with Mexico, saying she has visited the border and will do so again. After meeting with Mexican President Andres Manuel Lopez Obrador in Mexico City, Harris told reporters she had “been to the border before and will go again.”

Gambling habit: nun admits squandering school cash at casinos

A retired California nun has agreed to plead guilty to federal fraud and money laundering charges for stealing more than $835,000 from a school to pay for personal expenses including gambling trips, the Justice Department said. Mary Margaret Kreuper, 79, faces a maximum jail time of 40 years in federal prison for the charges, according to a Tuesday statement https://www.justice.gov/usao-cdca/pr/nun-who-ran-catholic-school-torrance-will-plead-guilty-federal-charges-after-embezzling from the U.S. Attorney’s Office of the Central District of California.

U.S. investigates disclosure of tax records on rich Americans

The Treasury Department has asked law enforcement authorities to investigate the disclosure of tax records cited in a media report that showed that some of America’s richest people paid little to no income taxes, U.S. officials said on Tuesday. U.S. media outlet ProPublica said it obtained “a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years.” The data indicated that billionaires including Amazon founder Jeff Bezos and Tesla founder Elon Musk paid no federal income taxes during some years.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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RPT-FOCUS-Gig companies’ push for state-level worker laws faces divided labor movement

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(Repeats to additional customers)

By Tina Bellon

June 9 (Reuters) – Uber and other gig economy companies are trying a new approach to ending their battles with unions, and getting ahead of possible federal regulation that could upend their business based on classifying workers as independent contractors.

In New York, for example, gig economy companies are working with several unions including the Machinists and Transport Workers Union to strike a compromise that would allow drivers and food delivery workers to organize in a union and negotiate minimum pay and other benefits without being reclassified as employees.

With the support of the unions, the gig economy companies are pushing state lawmakers in Albany to pass a bill that would allow workers to negotiate wages and caps on company commission fees, and provide unemployment insurance in some circumstances.

Among the most vocal opponents of a proposed bill to achieve that goal is the Service Employees International Union’s (SEIU) northeastern Local 32BJ, which says the compromise would enshrine gig workers’ misclassified status and create a company-sanctioned union that would only further erode workers’ rights by setting no floor for the negotiations.

“This legislation moves workers backwards,” Kyle Bragg, 32BJ’s president said. “There’s too much company manipulation.”

Amid the controversy, efforts to have the bill introduced before the end of the state’s legislative session this week failed.

New York is just one of several states where gig economy companies led by Uber, Doordash, Lyft and Instacart are courting unions and state officials in an effort to cement their workers’ status as independent contractors across the United States.

FAULT LINES

The push by the gig economy companies has exposed divisions within organized labor over whether to bargain with the companies, or insist on workers being reclassified as employees with full protection of U.S. labor standards – and a clear legal right to join unions.

The rifts at times also run within the same union. For example, while 32BJ rejects the New York bill, SEIU President Mary Kay Henry in the past said she would back workers’ demands in reaching a deal with companies. The SEIU declined to comment for this story.

Similarly, the New York chapter of the AFL-CIO, the largest U.S. labor federation, backs the compromise proposal, while members of its Colorado chapter said they were opposed to bargaining agreements with the gig companies.

According to a Reuters review, the companies over the past few months set up lobbying groups in Massachusetts, New York, New Jersey, Illinois, Colorado and Washington to push for laws that declare app-based ride-hail and food delivery drivers independent contractors, while proposing to offer them some benefits. In some states the companies hope for buy-in from labor groups, company and union officials said.

The companies are trying to build on their success in California, where voters approved an industry-backed ballot measure that exempts ride-hail and food delivery workers from rules that require other types of contractors to be classified as employees, and provides them with limited benefits.

The companies say they pursue tailored policies for each state to combine flexibility for their mostly part-time workers with benefits and protections. They have yet to offer concrete proposals in most states.

Some executives hope state-based independent contractor laws can also forestall federal action by the labor-friendly Biden administration, which has vowed to end the misclassification of workers as independent contractors.

“The models that are developed at the state level can be given a framework at the federal level,” Lyft President John Zimmer said during an interview last month.

While any state law could be superseded by federal rules, Zimmer’s calculation assumes that the U.S. Labor Department is less likely to act once facts on the ground are established.

The companies’ race for state backing runs counter to the labor movement’s single biggest legislative priority, the passage of a far-reaching labor reform bill known as the PRO Act in Congress. The bill would make worker organizing easier and among other things reclassify most independent contractors as employees for the purpose of collective bargaining, though not for wage laws and benefits.

The bill is unlikely to pass the Republican-led U.S. Senate, but even if it did, several years of regulatory and court wrangling would ensue, a time during which gig workers’ rights would remain unchanged, said Wilma Liebman, former chair of the National Labor Relations Board.

SKEPTICS ON BOTH SIDES

Some union figures have therefore taken a more pragmatic approach. Andy Stern, former president of the SEIU and at the time one of the most politically influential labor leaders, for the past six years has been trying to strike deals between the gig companies and unions, including failed attempts in California to ward off the ballot measure.

The California referendum, a costly victory for the gig companies, was also a cautionary tale for unions, as well as for drivers, who are now left without any avenues to organize or object to the terms stipulated by the companies.

Stern said internal union surveys in New York had repeatedly shown that a majority of drivers did not want to be employees and said debates focused solely on reclassification were based on unrealistic and purist sentiments.

Stern instead advocates for drivers’ rights to organize in unions and negotiate their own contracts.

“Give a worker a union and collective bargaining and they’ll decide themselves what kind of status, wages and benefits they want. People who believe litigation and legislation are the solution have failed these workers,” Stern said.

Stern and others dubious of reclassification point to Seattle and New York City, where years of union efforts to organize drivers have led to the only driver minimum wage laws in the country.

Uber and Lyft have rocky histories with unions and workers who want to organize. The companies in 2015 enlisted the U.S. Chamber of Commerce for a years-long court battle against a Seattle law spearheaded by the Teamsters union that would have allowed ride-hail drivers to bargain collectively.

Uber more recently appears to have opened up to such agreements, however. The company last month recognized Britain’s GMB union as the collective bargaining unit of its 70,000 British drivers. Lyft’s Zimmer said the company was having constructive conversations with labor leaders.

Many union officials remain skeptical about basing workers’ fate on the goodwill of companies.

“You never get everything you want out of collective bargaining…and it would be better to give drivers more options and protections under the law,” said Kjersten Forseth, political and legislative director for the Colorado AFL-CIO, which plans to make state-based gig worker policy solutions its focus over the next two years. (Reporting by Tina Bellon in Austin; Editing by Andrea Ricci)

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