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Shares of gig economy groups dive on comments by US labour official

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More than $15bn was wiped off the value of America’s largest gig economy companies on Thursday morning after the US labour secretary suggested some workers ought to be classified as employees.

Shares of ride-sharing pioneers Uber and Lyft and the food delivery service DoorDash were down by between 6 and 10 per cent after Marty Walsh told Reuters he felt workers should be treated as employees in “a lot of cases”.

“In some cases [workers] are treated respectfully and in some cases they are not,” he told the news agency. “And I think it has to be consistent across the board.”

Investors took the comments, from the head of a department with considerable influence over the interpretation of US labour law, as a significant threat to companies whose business models rely on the controversial “independent contractor” status of workers. This allows key costs — such as fuel and maintenance — to be passed on to the worker, and typically come with fewer protections and benefits.

“These companies are making profits and revenue and I’m not [going to] begrudge anyone for that because that’s what we are about in America . . . but we also want to make sure that success trickles down to the worker,” Walsh said.

He was planning meetings with gig economy companies in the coming months to discuss the issue, Reuters reported.

“Uber believes that we should be advancing policies to improve independent work, not eliminating it altogether,” the ride-sharing group said after Walsh’s comments were reported.

“But more important than what we think is what drivers think. Survey after survey shows that the overwhelming majority of app-based workers want to stay independent, because it allows them to work when, where and how they want with a flexibility no traditional job can match.”

Elizabeth Jarvis-Shean, DoorDash’s policy chief, said its drivers — which it calls Dashers — worked on average just four hours a week, and she called for a discussion on “modern policies” around work.

“Dashers have overwhelmingly told us that they value the flexibility to earn when and how they choose,” she said.

Lyft did not return a request for comment.

The Labor Department’s Wage and Hour Division is responsible for enforcing national criteria on whether workers are employees or independent contractors. The Trump administration sought to apply a looser interpretation of the criteria, but Walsh’s Labor Department has proposed rescinding the changes and is awaiting White House approval.

Gig companies have aggressively fought more localised efforts to bring about reclassification, most notably in California. The companies have warned that switching models to classify workers as employees would mean increased prices for customers and fewer and less flexible jobs for drivers. Workers would need to adhere to shift patterns rather than the current ad hoc logging-on for jobs, they argue.

Uber, both in the US and abroad, has lobbied for what it terms a “third way” of employment that rests between formal employee status and the less stable independent contractor arrangement. In the UK, the country’s highest court forced Uber to reclassify its ride-share drivers as “workers” — a UK-specific designation that offers some benefits, such as holiday pay and pension.

The US Bureau of Labor Statistics estimated in 2017 there were more than 55m gig workers in the US, a number that is expected to have risen considerably since.

During the pandemic, when demand for some gig worker services plummeted, many workers turned to specially crafted emergency programmes from the government to make ends meet.

“If the federal government didn’t cover the gig economy workers,” Walsh added, “those workers would not only have lost their job, but they wouldn’t have had any unemployment benefits to keep their family moving forward . . . [and] we’d have a lot more difficult situation all across the country.”

Walsh’s comments are the latest signal that the Biden administration intends to prioritise the issue of workers’ rights. During an address to Congress on Wednesday, President Joe Biden reiterated his support for the union movement, saying: “The middle class built this country. And unions build the middle class.”

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MLB mental health crisis: Inside relief pitching gig economy

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Ryan Buchter, 34, has spent almost half his life pitching in professional baseball. In those 15 years, Buchter has been traded four times, released three times, changed organizations 10 times, pitched for teams in 22 cities and only once spent a full season in the majors without being demoted or released. What his itinerant playing record does not show is its cost: a drinking problem, depression and mental health issues that left him so wounded he is speaking out because he knows his story is too prevalent among ballplayers.



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New Labor Secretary Says Gig Economy Workers Should Be Classified As Employees | Fisher Phillips

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Secretary of Labor Marty Walsh didn’t beat around the bush when he provided his first public thoughts about the gig economy workforce since assuming office. In an interview with Reuters released on Thursday, Walsh said “in a lot of cases, gig workers should be classified as employees.” His comments should come as little surprise to those in the industry who have tracked his career and followed President Biden’s campaign promises to crack down on purported misclassification.

While he tried to strike a balanced tone – noting that in “some cases” gig workers are treated respectfully, and indicating that he didn’t “begrudge” any companies for raising revenue and making profits – his pointed comments send a direct signal to gig economy businesses that the Biden Department of Labor will soon ramp up efforts to force gig workers to be considered employees.

What Can We Expect?

Walsh said that he wants his agency to have conversations with gig economy companies in the coming months in an effort to ensure workers have access to the types of benefits that a typical employee might have: consistent wages, sick time, health care insurance, and similar benefits. While some business leaders have expressed hope that Walsh’s pragmatic streak demonstrated throughout his career as a union leader and mayor would carry over to the worker classification debate, it appears that he will push through an aggressive agenda on behalf of unions and workers.

First up? We can expect to soon see the DOL to formally rescind the Trump-era “gig economy rule” that was set to make it far easier to classify workers as independent contractors. In its place, the agency will no doubt release a new rule that will more closely align with the Biden administration’s aim to target misclassification and ensure as many workers as possible are considered employees. While litigation filed by business groups is ongoing in an attempt to revive the business-friendly version of the rule, gig economy companies cannot rely on this federal lawsuit to be a magic bullet to erase all concerns in this area.

Walsh also noted the success of the pandemic-related unemployment insurance program that ensured gig economy workers who were left without work could regain some of their lost income. “If the federal government didn’t cover the gig economy workers, those workers would not only have lost their job, but they wouldn’t have had any unemployment benefits to keep their family moving forward. We’d have a lot more difficult situation all across the country,” he said. But in expressing admiration for that legislation – which was paid for by massive stimulus spending bills approved by Congress – he didn’t expressly state how he would expect any future extension of UI benefits for gig workers to be funded or managed.

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GigIndia to provide Rs 3 lakh health insurance to gig workers- The New Indian Express

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By Express News Service

NEW DELHI:  Large scale job losses over the past few quarters has led to many taking up work in the rapidly expanding gig economy, but the unorganised nature of the same may leave a large majority of those workers outside the cover of the formal insurance market. GigIndia, a business-to-business gig marketplace for on-demand work completion, has announced that it will provide free Covid health insurance to active gig workers on its platform covering up to Rs 3 lakh in medical expenses.

The Pune-headquartered firm said in a release that it is offering this insurance coverage to active gig workers in order to make them feel relatively secure during these challenging times. The company also said that it is initiating efforts to ensure that certified ‘giggers’ on its platform continue to receive projects, thereby enabling a steady income.

“The Covid Health Insurance will ensure that medical costs are covered if any gig worker tests positive for Covid-19. We are also providing financial assistance to gig workers, which will help them with essential expenditure such as hospital charges, oxygen cylinders and ventilators, among others,” said Sahil Sharma, Co-founder & CEO, GigIndia.

In addition to the Rs 3 lakh covid health insurance, the company has also set up an internal Rs 10 lakh covid relief fund for gig workers in need, he said, noting that unlike full-time white/grey collar workers, giggers typically do not receive social security benefits. 

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