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 caught the attention of at least one presidential candidate who has unveiled a plan called “A New Rising Tide” which, among other things, calls for greater protections for gig economy workers.
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.
It’s been a roller coaster two weeks for gig economy companies. On April 29, the U.S. Department of Labor handed gig economy companies a nice outcome by issuing an opinion letter confirming that typical gig workers are, indeed, independent contractors. Just days later, the 9th Circuit spoiled the party by saying that the California ABC test should be applied retroactively, opening the door for massive potential exposure against companies with a California presence. And on May 9, gig companies felt the second hit from a one-two punch when California’s Division of Labor Standards Enforcement issued an opinion letter extending the reach of the ABC test. Today, however, gig companies are feeling the good kind of whiplash after the National Labor Relations Board’s General Counsel released an advice memo concluding that a group of Uber drivers are properly classified as independent contractors and shouldn’t be permitted to proceed with their labor claims. The advice memo means it is much less likely that a traditional gig economy company, structured in a typical fashion when it comes to workforce operations, will face a valid unionization effort or could be found liable for an unfair labor practice charge.
I recently wrote about the January 25 decision from the National Labor Relations Board that makes it easier for businesses to classify their workers as independent contractors (SuperShuttle DFW, Inc.). You can read the full article here. In a nutshell, now that the Board is comprised of Trump appointees and majority Republican, it reversed a 2014 Obama-era decision that claimed to have “refined” the independent contractor test, but in practical terms, had made it harder to classify workers as contractors. The SuperShuttle case overturned the 2014 case and returned to a more balanced standard, one that gives more of an equal weight to both the right-to-control aspects of the relationship and the role of the workers’ entrepreneurship in operating their own businesses.
When considering the place of unions in the gig economy, many jump to the conclusion that the National Labor Relations Act does not apply because gig workers are usually independent contractors. While it is true that the NLRA does not apply to independent contractors, businesses should not discount the ability of gig workers to find ways to bargain for certain working conditions and get similar protections.
If you’ve been following the legal fight over Seattle’s 2015 proposal to permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form the country’s first gig economy unions, you might feel like you have been watching a tennis match. At first a court granted a preliminary injunction to block the ordinance from taking effect in April 2017, but a few months later the court dismissed a legal challenge and cleared the way for the ordinance to eventually take effect. But just today, before the law could become official, the 9th Circuit Court of Appeals revived a challenge filed by the U.S. Chamber of Commerce to the ordinance on antitrust grounds, sending the case back down to the lower court for further action.
Imagine one of your worst corporate nightmares comes true: a government body has determined that you have misclassified your workers, and they should be considered employees and not contractors. The ramifications could be devastating for your organization. You could be on the hook for overtime or minimum wage payments in the tens (or hundreds) of thousands of dollars, you may have unemployment insurance consequences to face, you may have an obligation to provide a cache of benefits to your workers, and perhaps even workers’ compensation insurance issues could arise. Your very business model may be threatened. But if certain administrative law judges had anything to say about it, your trouble could be just beginning: you could also be facing an automatic unfair labor practice (ULP) charge on top of your other worries.
The 9th Circuit Court of Appeals heard argument today over a proposal that would permit ride-sharing drivers who work for companies such as Uber and Lyft to organize and form unions. Given what could be at stake—the potential for the first-ever gig worker union—this has been a hard-fought legal battle to date, and today’s argument has been no different in nature.
Of all the public policy debates surrounding the gig economy of late, one of the hottest topics has been “portable benefits” – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job, or “gig to gig.” This push just got a major jumpstart that may turn out to be a game-changer.