With only a few weeks left in 2020 and a new administration set to take control of the Department of Labor a few weeks later, companies that rely upon a gig economy business model may be in store for a nice gift this Christmas season. According to Ben Penn and Bloomberg News, the Labor Department is planning on releasing its final misclassification rule – that will make it easier to categorize workers as independent contractors – before Christmas. Under this schedule, it will be set to take effect two months later. By then, however, there will be new leadership in the White House and at the Labor Department. Will that changeover mean that this gift for businesses will eventually turn into a lump of coal?
Delivery and rideshare drivers who work in the gig economy should get priority access to the COVID-19 vaccine, according to Uber CEO Dara Khosrowshahi. In a December 10 letter sent to governors in all 50 states, Khosrowshahi notes just how reliant Americans have become on gig workers during the pandemic, earning them a spot near the front of the line. What do you need to know about this development?
In a recent op-ed penned in Business Insider, DoorDash co-founder and CEO Tony Xu laid out a three-step plan necessary to ensure that our nation’s workplace laws stay current to address the ever-growing gig economy by creating a hybrid model of worker somewhere between employee and independent contractor. The November 29 piece also discusses some of the ways in which his company and similar businesses have been instrumental in providing needed services to consumers and all-important compensation for workers looking to manage through the pandemic and ongoing financial crisis.
The federal government has taken another step to further incentivize highly skilled workers to join the gig economy: it has proposed rules that would permit publicly held gig companies to offer equity compensation to their employees as payment. The rules, proposed by the Securities and Exchange Commission on November 24, would allow these companies to pay workers in stock during a five-year pilot period. “As our economy and work arrangements evolve, we must be willing to experiment with concomitant changes to our regulations,” commissioners Elad Roisman and Hester Peirce wrote in a statement that accompanied the release. However, there’s a good chance the rules may never get off the ground at all due to the impending changes in Washington, D.C. What do you need to know about this recent announcement?
The dust is beginning to settle after California voters overwhelmingly approved a new test for determining whether app-based rideshare and delivery drivers are considered employees or independent contractors, essentially overturning the ABC Test as it applies to a wide swath of the gig economy. But now that Proposition 22 proved to be wildly successful, what’s next? Here are the five biggest questions – and some answers – that remain in light of this groundbreaking development.
Now that all major media outlets have projected Joe Biden to be our next president, it is natural to begin to wonder what the next four years might look like for the gig economy. Our firm published a detailed assessment about what employers can expect in 11 key areas of workplace law that you can find here. I’d encourage you to give it a look; it covers some fascinating territory.
In one of the most closely watched (and most expensive) fronts in the ongoing battle over employment classification of gig workers, California voters appear to have approved Proposition 22, a ballot measure that confirms the independent contractor status of certain rideshare and delivery drivers. While likely not the end of the debate, the passage of Proposition 22 is a big win for the gig economy as it may have ripple effects across the industry.
Rideshare companies in California have now been ordered by an appeals court to reclassify their drivers as employees, threatening to upend the very foundation of the gig economy business model that offers flexibility and freedom to workers and businesses alike. Yesterday’s ruling by the California Court of Appeal upholds the injunction granted several months ago by a state court judge in San Francisco against the two biggest ridesharing companies in the country. But once again there is a silver lining to yesterday’s developments that provides a glimpse of hope for these businesses and gig economy companies in general – the order will not go into effect immediately, meaning that a ballot measure that will be decided on Election Day could permit their business models to survive despite the judicial setback.
The Department of Labor has turned down Congressional calls to extend the time period to receive public comments about the proposed independent contractor rule that would make it easier for gig economy businesses and other hiring entities to avoid federal misclassification claims. Yesterday’s announcement means that the agency remains on track to close the comment period on October 26, with a final rule to be released soon thereafter.
Gig economy companies across the country had a whirlwind September, as legal developments impacting their business models continued to unfold. Here are the five most significant workplace law developments in the gig economy world from the past month.