The formal regulatory notice released yesterday is so short and sterile that the average gig economy business could be forgiven for ignoring it: “The Department of Labor is proposing a regulation for determining independent contractor status under the Fair Labor Standards Act.” But the implications are immense. Given the manner in which the current administration has treated the misclassification question, yesterday’s announcement seems to be a signal that we will soon see a federal regulation that will provide a flexible standard permitting typical gig economy businesses to classify their workers as contractors under federal law.
In a budget deal finalized today and expected to be approved by state lawmakers in a matter of days, the California state legislature has reached an agreement that will see $17.5 million allocated toward enforcement of AB-5 in the 2020-2021 budget year. Unless the state law is radically revamped by voters through a November ballot measure, gig economy businesses can expect to be under the regulatory microscope by state enforcement officials for the foreseeable future. What can gig economy businesses expect given this development?
San Francisco ratcheted up the pressure on California gig economy companies by not only filing a misclassification lawsuit against DoorDash, but promising that more such litigation was to come against other companies. Upon filing the June 16 unfair business practices lawsuit – which appears to be the first instance where a California District Attorney has taken such an action – the San Francisco District Attorney said, “I assure you that this is just the first step among many steps that our office will take…” What do gig economy companies need to know about this latest troubling development?
Gig economy workers performing food delivery services in Seattle will receive an extra $2.50 per delivery during the COVID-19 pandemic thanks to a first-in-the-nation hazard pay law unanimously passed by the City Council on Monday. The bill now heads to Mayor Jenny Durkan’s desk; she has indicated she will sign it into law this week. What do gig economy businesses need to know about this groundbreaking development?
I was able to virtually attend a session of Albany Law School’s 2020 Warren M. Anderson Legislative Seminar Series last week on “The Gig Economy,” bringing together some of the nation’s foremost thought leaders on the subject for a lively and informative panel. A recording of the May 28 hour-long session can be found here and is available for free. (Many thanks to Albany Law School for the invitation and for allowing us to share the link here.) I teamed up with Richard Rifkin, Legal Director, Government Law Center – who hosted the event – to develop this summary.
A federal court judge in Massachusetts just rejected Lyft’s attempt to escape the reach of Prong B of the ABC Test, indicating it was “likely” that its rideshare drivers are employees and not independent contractors. The news wasn’t great for Lyft, but more importantly, the May 22 decision doesn’t portend well for gig economy companies trying to fit their traditional business model into the strict confines of the ABC Test. For those operating in states where misclassification conflicts are resolved using the test – we’re looking at you, California – this development isn’t the best news, and is definitely worth tracking.
The nation’s foremost workplace safety agency has issued industry-specific guidance for a number of businesses in the past few months, and late last week it finally released a document designed to help gig economy companies navigate the nation’s reopening. OSHA’s “COVID-19 Guidance for Rideshare, Taxi, and Car Service Workers” is the first formal piece of guidance to help steer this large segment of workers toward best safety practices, and could also be used as a good starting point for other similar gig economy businesses.
Not so long ago – 2019, to be exact – in a state not so far, far away – California – lawmakers passed the nation’s most controversial misclassification law to sweep as many independent contractors into employee status as possible. By now, most businesses recognize that AB-5 is the dreaded state statute that codified the “ABC test” across California and not the name of a new protocol droid. And most companies that have independent contractors in the state, especially gig economy companies, are quite familiar with how far-reaching the statute is. But is it so sweeping in nature that it would snare the Mandalorian, one of the Star Wars universe’s newest heroes, in its grasp? This May 4th, we’ll explore this question together.
We wrote about this issue several times in 2018, and now we may be about to get answer to a question that could prove critical to the growth—or stagnation—of the gig work labor pool: does performing gig work in between full-time jobs disqualify a worker from receiving unemployment benefits? The Pennsylvania Supreme Court is about to become the first state high court to decide this issue, and the country waits with bated breath to hear the answer.
Our Memphis colleague, Greg Grisham, recently published a guest column in the Memphis Business Journal entitled: “Independent Contractors Now Eligible For Unemployment Compensation.”