Following a proposed and failed bill in the New York State legislature during Summer 2019 that would have created a new category of “Dependent Worker,” and California’s passage of AB-5, which codified the ABC “employment” test into law, all signs pointed to 2020 being the year that New York instituted a sea change to the definition of independent contractor.
There’s an old saying that out of crisis comes opportunity – and the gig economy may be on the verge of living that adage. Thanks to the two trillion-dollar Coronavirus Aid, Relief, and Economic Security Act (CARES) Act signed into law last week, the entire industry may be forever altered because independent contractors will temporarily be able to recover unemployment benefits. The Pandemic Unemployment Assistance program expands coverage under the state-by-state unemployment compensation system to individuals “not eligible for regular compensation or extended benefits under state or federal law or pandemic emergency unemployment compensation,” which includes, but is not limited to, certain gig economy workers. Who is now eligible, and what will this mean for the gig economy?
Last week we gave you a seven-step action plan for how gig economy companies can respond to the COVID-19 coronavirus outbreak. A lot has changed in a week, so now it’s time to take a look around the industry to see how gig economy companies are actually responding to the crisis. You may consider adopting some of these same measures for your own company.
Given that the gig economy is a relatively recent phenomenon, the industry has not yet experienced some of the trials and tribulations that more-established business models have survived. Now though, for the first time, gig economy companies are forced to weather the storm of a public health crisis that threatens to upend the daily lives of hundreds of millions of Americans. What should gig economy companies consider in the coming days, weeks, and months to deal with the COVID-19 coronavirus crisis? Here’s a seven-point plan you should review and consider adopting.
Over a million Californians have said they want a chance to vote on the misclassification law that threatens to upend the gig economy as we know it – and that means that their wish will soon be granted. Thanks to a signature-collecting effort that has already far surpassed the necessary 623,000 signatures needed to place a measure on the ballot, voters in California will have the opportunity to pass a law this November that will exempt certain gig economy workers from the reach of the ABC test and instead ensure they are classified as independent contractors. The ballot measure, known as the “Protect App-Based Drivers & Services Act,” would see typical app-based drivers established as contractors regardless of AB 5 or the findings of state regulators if voters agree. Gig economy companies in California – and their workers – are now one step closer to regaining the independence and freedom that separated them from the business-as-usual world to begin with.
A New Jersey lawmaker recently took a big step towards creating a system of benefits for gig economy workers. New Jersey State Senator Troy Singletary introduced Senate Bill 943 which, if enacted, would “establish a system for portable benefits for workers who provide services to consumers through contracting agents” in the state.
After reviewing the 2,203 pieces of proposed legislation introduced in the California legislature by the February 21 deadline, it’s obvious that one issue will dominate debate in the 2020 session: the continued fallout from AB 5, the 2019 bill that codified and expanded the ABC test for determining independent contractor status. In fact, 34 separate pieces of proposed legislation that seek to modify or repeal AB 5, create new exemptions, or otherwise address the misclassification questions raised by the new law were introduced before the recent bill deadline. Let’s take a look at some of the key issues and the more prominent pieces of legislation.
Gig economy company Instacart lost the latest round of its misclassification battle in San Diego yesterday, as a California state court judge granted a preliminary injunction forcing it to reclassify its independent contractor workers as employees. But the judge took some of the sting out of the ruling by putting on hold any enforcement efforts by the city, allowing this “lively area of the law” to work itself out a bit more before dropping the hammer on the company. The February 24 ruling is the latest example of the ABC Test in action, demonstrating just how disastrous it could be to the traditional gig economy model and just how far it can be taken by aggressive government officials.
My colleague Todd Lyon wrote an excellent piece earlier this week about the House of Representatives passing the PRO Act, essentially a “wish list” for labor advocates seeking to tip the scales back towards unions. One of the items tucked away in that long laundry list of provisions that would come to pass should this bill become law: the notorious ABC test would be put into place across the country. Currently restricted to just a handful for states (most infamously, California), this test would become the law of the land if the House has its way.
CareerSource Florida, a government agency serving the state of Florida, recently released a report highlighting the growth of the gig economy in the state and emphasizing the positive impact it has had on the state’s economy. “The Study on the Gig Economy and Florida’s Workforce System” details information about the size and impact of the gig economy on the nation’s third-largest state.