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).
Philadelphia is about to become the first city in the country to approve legislation that would create a portable bank of paid time off for domestic workers. And it could create the model for a similar blueprint that would aid the gig economy workforce if implemented on a wider scale.
Lawmakers have begun to hold a series of hearings to discuss the “future of work,” and it may be no surprise that the two political parties have differing ideas about how that should impact the gig economy. The House Education and Labor Committee held the first of three such meetings on October 23, aiming to ensure that the law keeps up with modern developments such as automation, artificial intelligence, and the gig economy. While Democratic lawmakers seem to want to increase restrictions on the industry, their Republican counterparts are looking toward more flexible options. According to an article by Jaclyn Diaz of Bloomberg Law, the working subcommittees will recommend specific legislation early next year. What might such legislation look like, and what chances of success might it have?
Good news for Postmates delivery drivers…and for gig economy businesses across the country. The company recently announced that it would offer accident insurance benefits to its entire fleet of independent contractor drivers, providing the kind of safety net that many gig workers crave.
In a development many wouldn’t find surprising, a collation of forces announced this week that they would like to see ride-sharing drivers for Uber and Lyft receive a guaranteed base wage, flexible benefits, and a new drivers’ association to lend a united voice to represent their interests. What is surprising? The two forces that joined to make this call were the leaders of Uber and Lyft themselves.
There’s a great story in today’s Bloomberg Law by Genevieve Douglas highlighting the recent trend of states permitting self-employed workers – such as gig economy contractors – to enjoy the fruits of a paid family leave program on a portable basis. This can only be good news for gig economy businesses and the gig economy as a whole. After all, as gig workers are afforded greater opportunities to enjoy the kinds of benefits (with flexibility), the number of well-qualified and higher skilled workers to join the labor pool will only grow.
As I wrote previously, it is no secret that labor laws have been unable to keep pace with the changing economy, despite challenges from the bench to address the needs of the gig economy. Certain state legislatures (e.g. Washington) have taken steps to address needs of gig workers, with their ‘Paid Family and Medical Leave’ program expanded to include self-employed workers. And efforts to make portable benefits available to the gig workforce are ongoing, mostly at the state level. However, federal legislative and regulatory entities are seemingly mulling their options and allowing the change to occur from the bottom. Voices from the gig upper strata are becoming impatient, and want immediate legislative change, at the top.
Stock options, in large part, make some of the biggest public tech companies tick; a means of attracting top talent with the promise of big payouts down the road. In recent years, the gig economy has dominated the landscape in Silicon Valley and those lucky enough to land a job there have seen their personal fortunes grow overnight. Independent contractors, on the other hand – the pillars of the gig economy – have largely been left on the sidelines. That may soon change.
One of the drawbacks of entering the gig economy as a worker is that gig businesses are somewhat hamstrung by current law from providing a raft of benefits usually associated with full-time employment. That’s because companies that provide such benefits could run themselves into a problem by casting themselves close to the “employer” side of the misclassification debate. It’s a concern we have frequently written about, most recently just last month when Uber announced vague plans to begin offering benefits to its drivers. Now Lyft has joined the fray in a creative manner.