In anticipation of New York’s 2020 legislative session, state lawmakers are beginning to develop a proposal to regulate the gig economy – and the news isn’t good for businesses. As we discussed in an entry back in September, New York seems intent on developing a law including California-like elements that might lead to a version of the ABC test in the Empire State. But recent news means we might see things get taken a massive step further. Some legislative leaders are also seeking to introduce the country’s first collective bargaining law that would permit gig workers to unionize.
The gig economy has created a seismic shift to the traditional workplace model. With new (and oftentimes inexperienced) workers performing dangerous tasks in a “faster is better” manner, workplace safety has the potential to fall through the cracks. While the Occupational Safety and Health Act does not currently provide protection to most individuals working in the gig economy – the OSH Act covers employers/employees, not independent contractors – many employee advocacy groups are calling for more safety protections.
The burgeoning gig economy helps companies attract talent and gain new levels of nimbleness in support of efforts to satisfy customers and gain an edge on the competition. The gig relationship is obviously attractive to many. It gives workers greater flexibility, with meaningful opportunities for those who are entrepreneurially inclined.
We reported last year about the importance of a new retirement system for the gig economy. Typical gig workers are currently not entitled to enjoy a traditional employer-based retirement plan because the law only permits such plans to cover employees and not independent contractors. But the need for gig workers to have opportunities to save for retirement has done nothing but increase in recent years. Research shows that there are 56.7 million freelancers in the United States and Congress has yet to pass legislation creating a retirement system for them.
Seattle just joined New York City as one of the few locations in the country to pass minimum wage legislation for ride-share drivers, the city’s latest attempt to regulate the gig economy. Under the “Fair Share” program pushed by Mayor Jenny Durkan and unanimously approved by the City Council on November 25, a new tax of 51 cents per ride will be levied to fund affordable housing programs and other civic projects, as well as help pay for the $16 per hour minimum wage and various other workplace protections. The plan will only impact those ride-share drivers working for companies that handle 1 million rides per quarter in Seattle (which as of now would only impact Uber and Lyft drivers).
Things were starting to get dicey in the Garden State as the legislature debated a California-like proposal that would have caused serious problems for gig economy companies and other businesses utilizing contract labor. But a measure of good news emerged last Friday as Senate leadership announced there would be changes to the draft legislation to protect a greater number of independent contractors. While we still cannot be sure about the extent of the changes and whether the resulting amendments will permit the typical gig economy company to continue business-as-usual, there is reason for optimism that the state will look to balance both the interests of workers and the needs of business when it comes to legislation in this area.
We’ve written about the “Future of Work” efforts recently undertaken by Congress – a series of hearings aimed at discussing various issues that we can expect to impact workplaces in the near future. And according to a recent report by Bloomberg Law’s Jacyln Diaz, it appears that both political parties could be aiming to bridge their philosophical differences to find common ground when it comes to issues impacting the gig economy.
Gig workers in New York City recently gained a suite of workplace protections normally reserved for employees. The City Council amended its antidiscrimination laws in September to cover independent contractors, meaning that gig workers will soon have the right to pursue legal remedies against hiring entities that typically don’t have to be concerned about claims from this segment of their workforce.
Seattle attorney, Scott Prange recently wrote the feature story in the November 2019 edition of the Hawaii Bar Journal entitled, “The Gig Economy and Occupational Safety and Health.”
We’re now just a few weeks away from the nation’s most stringent independent contractor misclassification law taking effect in California. But if a group of truck drivers have their way, the law will stall out before it ever gets on the road. The California Trucking Association filed an amended lawsuit in federal court on November 12 asking the court to block the new statute from taking effect, claiming that it violates federal law and would harm over 70,000 independent truckers who have chosen to be independent workers. It appears to be the first legal challenge to California’s AB 5, and all eyes will be on this litigation over the next month.