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California moves one step closer to reining in the gig economy and expanding worker protections

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A million California workers are denied key workplace protections—including the minimum wage—because their employers falsely label them as independent contractors. But that came one step closer to changing on Friday when the state Senate’s appropriations committee passed Assembly Bill 5, a plan to crack down on that misclassification of workers.

AB5 is based on a 2018 decision by the California Supreme Court that imposed a stricter test for whether a worker could be considered an independent contractor. Companies can’t call workers independent contractors if the work they do is central to the company’s mission or if the company substantially directs their work, the court ruled. The legislation will make enforcement significantly easier, but it also includes a lot of exemptions for professions such as doctors, lawyers, architects, engineers, accountants, insurance agents, hairstylists, and more.

The trucking industry and app-based companies like Uber and Lyft have been screaming for exemptions but so far, their efforts are in vain. “Trucking has some of the worst violators,” said Assemblywoman Lorena Gonzalez, the bill’s author. “We are not going to strip out employee protections.” Uber, Lyft, and others are threatening to pour $90 million into a campaign for a ballot measure exempting them, which could become a massive fight in 2020.

Other workers who will be covered by AB5 include janitors, construction workers, manicurists, strippers, and some in the tech industry. Being an employee means protections including the minimum wage, overtime, workers comp, sick leave, family leave, and more, in addition to employer payments for Social Security and Medicare. Companies also don’t pay payroll taxes on independent contractors, shorting the state of California by an estimated $7 billion a year on misclassified workers.

The bill, which passed the state Assembly, heads to the full Senate for a vote that’s expected to succeed. According to a spokesman for Gov. Gavin Newsom, “The governor is supportive of addressing the misclassification of workers, which for decades has been a driver of income inequality.”

This blog was originally published at Daily Kos on September 3, 2019. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos.

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These Hotel Workers Say They Shouldn’t Have to Work Multiple Jobs to Make Ends Meet

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Hotel workers union UNITE HERE isn’t resting on its laurels after winning a contract fight with the giant Marriott chain late last year. The union is pursuing new organizing efforts, including a push in Baltimore for a first contract covering some 145 newly unionized members there, according to Vikas Mohite, a full-time Marriott employee and active rank-and-file union member.
 This article was originally published at In These Times on August 8, 2019.  Reprinted with permission.
About the Author: Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA’s Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper’s New York City headquarters and in the Washington, D.C. bureau.

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Economy Gains 75,000 Jobs in May; Unemployment Steady at 3.6%

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The U.S. economy gained 75,000 jobs in May, and the unemployment rate remained at 3.6%, according to figures released this morning by the U.S. Bureau of Labor Statistics. Wage growth of 3.1% was lower than last month’s 3.4% and, a downward revision of 75,000 for the job numbers for March and April signals that the Federal Reserve’s Open Market Committee needs to inch down interest rates.

In response to the May job numbers, AFL-CIO Chief Economist William Spriggs tweeted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Last month’s biggest job gains were in professional and business services (33,000), health care (16,000) and construction (4,000). Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, showed little change over the month.

Among the major worker groups, the unemployment rates fell for blacks (6.2%). The unemployment rates for teenagers (12.7%), Hispanics (4.2%), adult men (3.3%), whites (3.3%), adult women (3.2%) and Asians (2.5%) showed little or no change in May.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed in May and accounted for 22.4% of the unemployed.

This blog was originally published by the AFL-CIO on June 7, 2019. Reprinted with permission. 

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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California Assembly votes to rein in gig economy abuses, this week in the war on workers

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The so-called gig economy often rests on exploiting workers by misclassifying them as independent contractors, which means they don’t get minimum wage, unemployment insurance, workers compensation, overtime pay, or other protections that regular employees are guaranteed (at least in theory). That may be about to change in California, where the state Supreme Court ruled to clarify how workers are classified last year, and the Assembly passed a bill this week tackling the issue.

If the bill becomes law, employers could only classify workers as independent contractors if they could prove that the workers truly controlled their own schedules and working conditions, weren’t doing work central to the company’s business model, and had their own “independently established” business or role. That would have huge ramifications for huge companies like Uber, Lyft, and Amazon, but would also apply to workers at many small businesses. The bill does exclude many jobs, though, such as doctors, real estate agents, lawyers, and some hairdressers.

AB 5 passed 53 to 11 in the Assembly and now heads to the state Senate. “Big businesses shouldn’t be able to pass their costs onto taxpayers while depriving workers of the labor law protections they are rightfully entitled to,” tweeted Assembly member Lorena Gonzalez, one of the bill’s authors, in celebration of its passage.

This blog was originally published at Daily Kos on June 1, 2019. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos.

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Federal court deals a blow to Uber, Lyft drivers trying to unionize in Seattle

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A two-year legal battle over a Seattle, Washington law allowing Uber and Lyft drivers to unionize was prolonged again this week, after a federal appeals court ruled Friday that it can be challenged under federal antitrust law.

The first-in-the-nation law was unanimously passed by the Seattle City Council in 2015 and sought to give ride-share drivers the opportunity to unionize and bargain for better pay and benefits.

But it was swiftly challenged by business and conservative groups, namely the U.S. Chamber of Commerce, representing Uber and Lyft, the National Right to Work Legal Defense Foundation, and the Freedom Foundation. In a 2016 lawsuit against the city of Seattle, the Chamber of Commerce claimed “the ordinance will burden innovation, increase prices, and reduce quality and services for consumers.”

One legal challenge was dismissed last year, but the law remained on hold until other legal challenges were resolved. On Friday, three judges on the 9th U.S. Circuit Court of Appeals unanimously agreed that Seattle’s law is not exempt from the Sherman Antitrust Act, sending it back to U.S. District Court.

Uber spokesman Caleb Weaver called the decision “a win for rideshare drivers, riders and the entire Seattle community.”

The Teamsters Local 117 and members of the App-Based Drivers Association (ABDA) expressed their frustration and disappointment in the wake of Friday’s ruling.

“Anti-trust laws were put in place to protect the little guy from monopolistic practices from large corporations, not to shield a company like Uber — valued at over $70 billion — from negotiating with its workers over fair pay and working conditions,” said Don Creery, Uber and Lyft driver and member of the ABDA leadership council.

One bright spot for proponents of Seattle’s law: the Ninth Circuit judges agreed in their ruling that the National Labor Relations Act (NLRA) can cover independent contractors, like Uber and Lyft drivers.

This week, Sen. Bernie Sanders (I-VT), along with other Senate Democrats, introduced legislation that would make it easier for people working in the gig economy to prove they are employees and thus be able to organize and collectively bargain. While the legislation doesn’t stand a chance in the current Republican-controlled Congress, Bloomberg notes that it has the backing of potential Democratic presidential candidates and could be a sign of things to come if Democrats are able to regain control of either chamber this fall.

This article was originally published at ThinkProgress on May 13, 2018. Reprinted with permission. 

About the Author: Kiley Kroh is a senior editor at ThinkProgress.


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California court decision poses a major threat to Uber and Lyft: minimum wage laws

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The business model at Uber and other “gig economy” companies could take a big hit in California, thanks to a new state Supreme Court ruling—the companies might be forced to follow labor laws like paying the minimum wage. Currently, many companies classify their workers as independent contractors who aren’t eligible for a raft of legal protections, protections that cost employers money. But the California Supreme Court ruled that delivery drivers for Dynamex Operations West are eligible for minimum wage and overtime protections:

The ruling applies to disputes under state Industrial Welfare Commission orders that set standards for minimum wages and overtime payments required for all workers who are classified as employees, but not for independent contractors. Companies like Dynamex, as well as Uber and Lyft, have classified their drivers as contractors and argued that they have enough control over their working lives — setting their own hours, with the freedom to drive for other companies — to be called independent.

But the court said the company, to justify contractor status, must prove, first, that the worker is free, in everyday tasks, from the company’s “control and direction”; second, that the work is “outside the usual course of the hiring entity’s business”; and third, that the worker is regularly engaged in an independent occupation or business of the same type he or she is performing for the company.

For example, [Chief Justice Tani] Cantil-Sakauye said, a store that hires an outside plumber to fix a leak, or an electrician to install a new line, could consider them contractors. But a clothing manufacturer that hires seamstresses who work at home to make dresses that the company will sell has hired them to perform work in its usual line of business and must pay them as employees.

The ruling did not address other issues, such as payment of work expenses, workers’ compensation and unemployment benefits, which are covered by separate laws. But Kevin Ruf, a lawyer for about 300 Dynamex drivers who will now be allowed to pursue their case as a class action, said the court’s rationale should help workers seeking employee status overall.

This isn’t over—companies will fight this out case by case, spending huge amounts of money on lawyers to avoid having to pay their workers minimum wage and overtime (and other benefits and protections that might follow). But it’s a step in the right direction.

This blog was originally published at DailyKos on May 1, 2018. Reprinted with permission.

About the Author: Laura Clawson is labor editor at DailyKos.


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