The gig economy is inevitable. Ride-hailing drivers, delivery cyclists and on-demand dog walkers are not just the future of work, they’re a growing share of today’s workforce. But with the understanding that this type of work isn’t going away anytime soon, union leaders and lawmakers are calling for the gig economy to catch up with the labor and employment protections that were standardized for traditional employees decades ago.
One bill in New York, introduced at the end of the state legislative session in June, sought to create a new employment classification for gig economy workers and give them the right to organize and collectively bargain. The Dependent Worker Act, sponsored by state Sen. Diane Savino and Assemblyman Marcos Crespo, would also have given those “dependent workers” protections like the explicit prohibition of wage theft and record-keeping requirements.
However, the Dependent Worker Act fell by the wayside in the hectic final days of the session, but it didn’t go unnoticed.
Both the tech industry and some labor groups were quick to object to the bill, though for different reasons. At the time, the industry association Tech:NYC argued that the new dependent worker classification would upend the sector and that the bill sponsors didn’t give companies a seat at the table. Labor groups like 32BJ SEIU and the New York Taxi Workers Alliance, meanwhile, thought the dependent worker classification didn’t go far enough to ensure gig workers receive the same labor protections as regular employees.
The New York State AFL-CIO did, however, support the legislation as a step in the right direction for workers. “This issue cropped up late in the legislative session, and it’s not at all uncommon for issues to fall off the table, whether at the end of session or end of the budget,” Mario Cilento, president of the state AFL-CIO, said recently in an emailed statement. “We are pleased however that protections for this class of workers received as much attention as it did last June and we look forward to building on that momentum going into the 2020 legislative session.”
Despite strong objections on both sides, Savino is ready to take another crack at the legislation next year. “We certainly got everyone’s attention. Everyone went running around banging into walls,” Savino told City & State. “And so now we step back and say, ‘OK, fine. You didn’t like that bill. Let’s talk.’” The Staten Island Democrat said she is scheduling a hearing on the bill for Oct. 16 and encouraging all stakeholders to attend. “I think one of the most important things is that this is an economy that’s not going away,” she said.
As it stands now, gig economy workers are typically classified as independent contractors, or self-employed workers. New York state’s criteria for independent contractors include that the workers must be free from supervision, direction and control in performing their duties. While some gig workers and freelancers inevitably meet those criteria, labor groups argue that many gig workers are misclassified as independent contractors, and therefore miss out on the labor protections guaranteed to employees.
“In general, independent contractors are self-employed, by law. That means they are their own employers,” said Erin Hatton, a sociology professor at the University at Buffalo and an expert on labor movements and the gig economy. “So they don’t have those employee protections that we give people who are deemed to have an employer. So that means everything from minimum wage and overtime protections, to discrimination in hiring and firing, and so on.”
Ride-hailing companies in particular have been accused of misclassifying their workers as independent contractors, but these classification questions arise with all sorts of gig workers, Savino said. These problems also didn’t arrive with the advent of smartphone apps. Hatton pointed to a FedEx settlement over misclassifying drivers as independent contractors as far back as 2000. Still, the rise of the app-based gig economy is bringing the issue to the forefront.
“Increasingly, we’ve seen employers trying to get around that system of protections by misclassifying their workers as independent contractors by kind of ludicrously claiming, for example, that, ‘Oh, we’re just a tech company who provides tech,’ even though the only thing they actually provide are drivers through the technology that they’ve developed,” Hatton said.
Though the bill was introduced hastily at the end of the session, New York’s debate over how to classify gig workers and what kind of labor protections they should have is coming at the right time. The center of this debate is in California, which is attempting to pass a bill codifying a 2018 California Supreme Court decision that would classify workers using what’s called an “ABC test.” Under the test, workers would have to be free from the control of an employer, doing work outside the usual course of business of an employer and engaged in an independently established business in order to be classified as an independent contractor. Many believe that ride-hailing drivers would fail this test, meaning they would be classified as employees.
Some labor groups are eager to see New York adopt the ABC test as well. In June, New York Taxi Workers Alliance Executive Director Bhairavi Desai and Héctor Figueroa, the late president of 32BJ SEIU, pointed to the test as a preferable alternative to the Dependent Worker Act.
“It is a sensible approach because it would provide these workers with protections that they badly need,” said Maria Figueroa, director of labor and policy research at the Worker Institute at Cornell University’s School of Industrial and Labor Relations, and the ex-wife of Héctor Figueroa. Maria Figueroa noted that it wouldn’t just give workers protections, but would benefit states too. “Right now, due to the fact that these workers are classified as independent contractors, the states are also not receiving tax revenues that they could receive if these workers were classified as employees,” she said.
But if the tech industry’s objection to the Dependent Worker Act was strong, a test that would likely change the status of many gig workers from independent contractors to employees isn’t being well received. The ride-hailing industry has been fighting the California bill, commonly referred to as AB5, advocating instead for giving worker-determined benefits like health care and pension plans. A “portable benefits package” could give gig workers those benefits without turning them into employees.
Maria Figueroa said that if New York took that approach, the benefits should meet current labor standards for employees. “People who are against portable benefits are arguing that if we are going to have portable benefits, they should guarantee protections and they should be at the level of the standards offered by current negotiated pension and health care benefits,” she said.
Savino is open to the portable benefits approach as an option. Whether it comes in conjunction with a new dependent worker classification, or on its own, she’s not sure. Savino is, however, skeptical about the viability of the ABC test. “At first blush, I believe what they’re doing in California is a little bit too rigid,” she said.
At this point, Savino is waiting to hear feedback from stakeholders this fall. But with tech and labor on opposite ends of the spectrum, it remains to be seen whether a compromise could realistically happen.
Zach Hecht, policy director at Tech:NYC, echoed Savino in saying that conversations with all stakeholders is the right place to start. But Desai of the New York Taxi Workers Alliance disagreed. “I would say that that’s not the starting point,” Desai said. “As workers, you have to know what you want for yourself, rather than have it be dictated by compromises that the corporation wants to impose on you.”
A spokeswoman for 32BJ SEIU said that the union is working with a coalition on an ABC test program for New York. “ABC tests are already a proven model that New York has instituted for misclassification in construction and commercial transport industries,” said Kyle Bragg, the union’s newly elected president said in an emailed statement. “Tech companies should play by the same rules as any other employer.”
With California’s legislative session concluding in September, New York is unlikely to act before seeing the outcome of AB5. If it passes, the ABC test would represent a monumental change for much of the gig economy that could impact the direction New York takes. “Legislators are following closely what is going on in California,” Maria Figueroa said. “Whatever happens in California and in New York usually sends a signal to all other states, because these two states are the leaders in terms of setting labor and employment standards.”
But as far as tech legislation goes, there’s some precedent for New York waiting on the sidelines while California takes big swings. Hecht pointed to California’s digital privacy legislation, which goes into effect in 2020, as an example. “It’s not exactly clear how it will work in practice, or what the implications will be,” Hecht said of the California Consumer Privacy Act. “So we can monitor, look at what the implications of something will be and then pass better regulations in New York or take a better and more measured approach that has less negative implications.” New York could take that same approach if AB5 passes in California.
“California does what they want. Sometimes California and New York are on the same page, and sometimes they’re in totally different places,” Savino said. “My goal is for us to put forward the best piece of legislation that becomes a model for the nation, regardless of what happens anywhere else.”
NEW YORK CITY’S 1.3 MILLION FREELANCERS EARN $31.4 BILLION
In New York City, 1.3 million people freelanced in the past 12 months, and they had earnings of $31.4 billion, according to a study, “Freelancing in New York: 2019” released last week by the New York City Mayor’s Office of Media and Entertainment, Freelancers Union and Upwork Inc.
Looking at just the media and entertainment sector, 61% of workers said they have freelanced in the past 12 months.
“New York City may very well be the freelance capitol of the world, and this study shows the massive impact these creative workers have on our economy,” said New York City Council Member Robert Holden, chair of the Committee on Technology.
A majority of freelancers (62%) were freelancing by choice.
And 50% of freelancers did so part-time, 29% freelanced full-time and 20% did it to supplement traditional full-time work.
Other findings in the study included:
For New Yorkers engaged in freelance work, 45% of their income comes from freelancing on average on an individual level.
73% of New York City freelancers use friends, family, clients or professional contacts as a means of finding work. That figure rises to 80% for media and entertainment freelancers.
Freelancers’ primary concern is access to affordable health insurance. They also worry about managing their day-to-day finances and collecting payments for services as 74% have experienced nonpayment or late payment.
The study included 5,000 working adults in New York City. Of those 1,728 had engaged in freelance work.
New York Set To Join Michigan In Banning Some E-Cigarettes
New York Gov. Andrew Cuomo said Sunday he will push for a ban on some e-cigarettes amid a health scare linked to vaping — a move that would follow a similar ban enacted by Michigan and a call from President Trump for a federal prohibition on certain vaping products.
Speaking in Manhattan, Cuomo, a Democrat, said the state’s Public Health and Health Planning Council and state health commissioner Dr. Howard Zucker would issue an emergency regulation banning flavored e-cigarette products.
“Vaping is dangerous,” the governor said. “At a minimum, it is addicting young people to nicotine at a very early age.”
“We would ban all flavors besides tobacco and menthol,” he said.
The push at the state and federal levels to ban certain vaping products comes as the Centers for Disease Control and Prevention said last week that 380 confirmed or probable cases of lung disease associated with e-cigarettes had been identified in 36 states and the U.S. Virgin Islands, with six confirmed deaths.
Earlier this month, Michigan imposed a similar ban. Bills to halt the sale of flavored vaping products have been introduced in California and Massachusetts.
Last week, Trump, appearing beside Health and Human Services Secretary Alex Azar, announced that his administration would move toward a federal ban of flavored vaping products.
“Vaping has become a very big business, as I understand it, but we can’t allow people to get sick and allow our youth to be so affected,” the president said.
“We intend to clear the market of flavored e-cigarettes to reverse the deeply concerning epidemic of youth e-cigarette use that is impacting children, families, schools and communities,” Azar said in a statement.
In July, Cuomo signed a law that raised the minimum age for purchase of tobacco and e-cigarettes in the state from 18 to 21.
UAW Goes On Strike Against General Motors
The United Auto Workers began a nationwide strike just before midnight on Sunday at General Motors after both sides failed to agree on a new contract over issues including wages, health care and profit-sharing.
Production across the U.S. is expected to be halted, affecting nearly 50,000 worker at 33 manufacturing plants in nine states as well as 22 parts distribution warehouses until a new contract is hammered out.
“At midnight tonight, the picket lines will go up,” the UAW’s Brian Rothenberg said at a news conference in Detroit on Sunday. “But basically, when the morning shift would have reported for work, they won’t be there. The picket lines are being set up.”
Night-shift workers at a plant in Bedford, Ind., that makes transmission castings and other parts, shut off their machines and went home, Dave Green, a worker, told The Associated Press.
Green, who transferred from the now-closed GM car factory in Lordstown, Ohio, said: “This is not about us. It’s about the future.”
The strike is the first against GM since a two-day walkout in 2007.
On Saturday, union officials allowed their contract to lapse around midnight. GM leadership has sought to contain the company’s health care costs, but union leadership said workers refuse to agree to a contract that makes health care more expensive for them.
“While we are fighting for better wages, affordable quality health care, and job security, GM refuses to put hard working Americans ahead of their record profits,” UAW Vice President Terry Dittes said in a statement. “We don’t take this lightly.”
Officials at GM said in a statement to NPR that the company “presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways,” adding that: “It is disappointing that the UAW leadership has chosen to strike.”
Kristin Dziczek, vice president of the Center for Automotive Research, an independent research organization, said both sides are looking at the prospect of a weakening economy.
“The company and the union look at the very same set of economic fundamentals and see the same writing on the wall and have different motivations,” Dziczek said.
“The company looks at that and says, ‘Well, if we hit a downturn, we want to be able to have contingent compensation, so we don’t get locked into paying higher costs if the market softens.’ That same set of economic facts drives the union to want more guaranteed and certain compensation: base wage increases,” she said.
Dziczek said the strike would have to last more than a month to affect inventory at car dealerships. But she said the impact will ripple fast across North America.
“There’s great reliance on cross-border trade in engines and transmissions and other parts to support production in Canada and Mexico, so it wouldn’t take long before Canada and Mexico were also shut down,” she said.
Some of the major sticking points include the cost of health insurance and pay raises demanded by workers. GM made $8.1 billion in profits last year.
GM has announced closing four factories and the union has been fighting those decisions. GM says the average hourly employee makes around $90,000 a year. The UAW’s Ted Krumm said the union will not make concessions.
“This strike is about us. It’s about standing up for fair wages, for affordable, quality health care, for our share of profits and for our job security,” Krumm said at a Sunday press conference.
The move to strike comes as legal troubles follow the union. A federal corruption scandal has led to guilty pleas by five people in the UAW. The FBI has raided the home of Gary Jones, the union’s current president. Some workers have called on Jones to step down amid the probe, which has accused some union officials of hiding bribes and embezzling money from the union.
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