Opinion: You Call It the Gig Economy, but California Calls It “Feudalism”

From today’s New York Times:

Labor leaders cheered in the balcony and lawmakers embraced on the floor of the California Senate on Tuesday as it passed a landmark measure that defines employees, a move that could increase wages and benefits for hundreds of thousands of struggling workers.

Image result for uber

But the bill is as much a starting point as an endgame: It will drive a national debate over how to reshape labor laws fashioned in the industrial era of the 1930s to fit a 21st-century service and knowledge economy.

With the measure, which Gov. Gavin Newsom says he will sign, California will lead in a shift that will likely redefine the roles of governments, unions and worker organizations. Just as federal labor laws were promulgated to help the country recover from the Depression, the imperative to extend basic guarantees like a minimum wage stems from the staggering income inequality in California, the state with the highest poverty rate in the country.

The new paradigms will need to fit not the relatively stable industrial work force of the last century but a gig economy in which workers are increasingly likely to hold multiple jobs or report to no workplace at all. California lawmakers took a major step in constructing the foundation of such a model with the new measure, which presumes workers are employees, entitled to all concomitant protections and benefits, unless they meet strict criteria as truly independent contractors.

Read the complete article here.

Sweeping bill rewriting California employment law sent to Gov. Newsom

From today’s Los Angeles Times:

California lawmakers rewrote the rules of employment across a wide swath of industries Wednesday in legislation that could grant hundreds of thousands of workers new job benefits and pay guarantees.

After vigorous debates over what occupations should be exempted, Assembly Bill 5, which curbs businesses’ use of independent contractors, gained final approval in the state Senate and the Assembly and was sent to Gov. Gavin Newsom, who has pledged his support.

The 6,700-word bill is one of the most controversial of the year. It could upend the relationship between workers and bosses across businesses as varied as ride-hailing tech giantsconstruction, healthcare, truckingjanitorial servicesnail salonsadult entertainment, commercial fishing and newspapers.

The message of the legislation, said its author, Assemblywoman Lorena Gonzalez (D-San Diego), is “we will not in good conscience allow free-riding businesses to continue to pass their own business costs on to taxpayers and workers. It’s our job to look out for working men and women, not Wall Street and their get-rich-quick IPOs.”

Contractors, including many in multibillion-dollar technology companies, are not covered by laws guaranteeing a minimum wage, overtime pay, sick leave, family leave, unemployment and disability insurance, workers’ compensation and protection against discrimination or sexual harassment. Nor do businesses pay into Social Security or Medicare for contractors.

After months of lobbying by the California Chamber of Commerce and a score of trade associations, AB 5 exempted a host of occupations — but not platform-based gig giants Uber, Lyft, DoorDash, Postmates and others that mounted a powerful push to avoid reclassifying their workers as employees with labor law protections.

Read the complete article here.

Uber drivers are contractors, not employees, U.S. labor agency says

From today’s Reuters News Service:

Drivers for ride-hailing company Uber Technologies Inc are independent contractors and not employees, the general counsel of a U.S. labor agency has concluded, in an advisory memo that is likely to carry significant weight in a pending case against the company and could prevent drivers from joining a union.

The recommendation by the office of general counsel Peter Robb, who was appointed to the National Labor Relations Board by President Donald Trump, was made in a memo dated April 16 and released on Tuesday.

The general counsel said in the memo that Uber drivers set their hours, own their cars and are free to work for the company’s competitors, so they cannot be considered employees under federal labor law.

A ruling on the case is to be made by an NLRB regional director. Advisory memos from the general counsel’s office are generally upheld in rulings. Any decision could be appealed to the NLRB’s five-member board, which is also led by Trump appointees but is independent of the general counsel.

Read the complete article here.

Labor Dept. Says Workers at a Gig Company Are Contractors

From today’s New York Times:

The Labor Department weighed in Monday on a question whose answer could be worth billions of dollars to gig-economy companies, deciding that one company’s workers were contractors, not employees.

As a result, the unidentified company — whose workers, it appears, clean residences — will not have to offer the federal minimum wage or overtime, or pay a share of Social Security taxes. And while the decision officially applies only to that company, legal experts said it was likely to affect a much larger portion of the industry.

The move signals the Trump administration’s approach to the way gig companies, a growing share of the economy, must treat their work force. As companies like Uber and Lyft begin to sell shares to the public, industry officials estimate that requiring them to classify their workers as employees would raise their labor costs by 20 to 30 percent.

“Today, the U.S. Department of Labor offers further insight into the nexus of current labor law and innovations in the job market,” Keith Sonderling, an official in the division that oversees such issues, said in a statement. It is a longstanding policy for the department not to disclose the names of companies receiving such letters.

Read the complete article here.

He Has Driven for Uber Since 2012 and He Makes About $40,000 a Year

From today’s New York Times:

Uber’s public stock offering next month will make a bunch of people remarkably rich. Peter Ashlock is not one of them, although he has toiled for the ride-hailing company almost since the beginning.

Mr. Ashlock, who will be 71 next week, has racked up more than 25,000 trips as an Uber driver since 2012. His Nissan Altima has 218,000 miles on it — nearly the distance to the moon. His passengers rate him 4.93 out of five stars. His favorite review: “Dude drove like a cabdriver.”

While he is an integral part of Uber’s success, Mr. Ashlock is barely getting by. His 2018 tax return will show an adjusted gross income in the neighborhood of $40,000, better than 2016 and 2017. But he has maxed out his $3,200 credit limit at the local Midas car-repair shop and needs to come up with $5,000 to pay his taxes. He has Social Security but no savings to buy a new car that will let him keep working.

Silicon Valley has always been a lottery where immense wealth is secured by a few while everyone else must hope for better luck some other time. Rarely, however, has the disparity been on such stark display as with Uber. Its stock market value is expected to be about $100 billion, which would make it one of the richest Silicon Valley public offerings of all time.

Among those with something to celebrate: Uber’s founders, the Japanese conglomerate SoftBank, the elite venture capitalists Benchmark and Google’s GV, Saudi Arabia’s Public Investment Fund and the mutual fund giant Fidelity. Some have already cashed in. Travis Kalanick, Uber’s co-founder and chief executive until he was forced out after a series of scandals, reaped $1.4 billion by selling fewer than a third of his shares to private investors in 2017.

As independent contractors, drivers are not eligible for employee benefits like paid vacations or stock options. Uber said Thursday that it would offer bonuses of $100 to $10,000 to long-serving drivers. Its chief competitor, Lyft, did the same when it went public in March.

Read the complete article here.

The Gig 101: The Con of the Side Hustle

From today’s New York Times:

An attractive woman behind the wheel of a gray car says to the camera, “These days anyone can have a side hustle.” She then whisks off to the gym, for her other job as a personal trainer, beaming as she goes from one gig to another. This ad for the ride-share company Uber seeks to entice new drivers to join their ranks by using the “side hustle” come-on. The company isn’t alone.

Similarly laborious “side hustles” are celebrated in popular media and advertising, from self-help articles and other web content that exhort us to, say, work for a design studio part-time or sell CBD oil (great as a side hustle for moms, supposedly). Even pastors can use a side hustle, according to one evangelical blogger.

During tax season, you will also find filing suggestions for side hustlers. (Report all of your income! Deduct expenses!)

The truth is, working multiple gigs creates complications when you do your taxes. Compared with those with salaried jobs, who pay their taxes seamlessly through withholding, for side hustlers “the process will be a lot messier,” according to Steven Dean, the faculty director of the Graduate Tax Program at New York University Law School. You have to estimate and pay taxes on your own, he notes, and your expenses may not be reimbursed by your employer. In other words, paying quarterly tax estimates gives workers with side hustles yet another side hustle — being their own accountant, although this gig doesn’t even pay.

Nevertheless, this nouveau moonlighting continues to be exalted ­as cool, empowering or freeing. This mantra is false: Side hustles are not simply a new version of working as a “wage slave” so that we can do what we love in our off hours. Instead, far more often, people take on second or third side hustles because of wage stagnation or low pay at their full-time jobs.

Read the complete article here.

Instacart and DoorDash’s Tip Policies Deliver Outrage to Workers, Customers

From today’s New York Times:

Delivery has always been a rough business. Since time immemorial, couriers have braved the elements, gotten by on meager wages and dealt with annoying customers, growling dogs and fifth-floor walk-ups, all for the chance of a big tip from a happy customer.

But thanks to two Silicon Valley upstarts, even those tips are in doubt.

This week, Instacart and DoorDash — two giants of the app-based delivery industry, collectively valued by investors at more than $11 billion — have come under fire from critics who have accused the companies of taking advantage of their workers with deceptive tipping policies. Both companies acknowledged putting customer tips toward workers’ minimum pay guarantees, in effect using them to subsidize their own payouts.

“It’s offensive, it’s unethical and in this climate, it’s a very dumb thing to do,” Matthew Telles, an Instacart courier based in Chicago, said this week.

Ashley Knudson, a Seattle-based Instacart worker, said she felt “cheated” by the company.

“I have gone from making $1,000 a week and providing for my family to now, if I’m lucky, making $600 a week,” she added.

Read the complete article here.

Breaking: Uber Is Target of Sex Discrimination Inquiry by EEOC

From today’s New York Times:

Federal officials are investigating allegations that Uber discriminated against women in hiring and pay, another federal inquiry into a company that has been rocked by scandals over its workplace culture and other issues.

The Equal Employment Opportunity Commission, which polices work force discrimination, began investigating Uber last August, according to two people familiar with the inquiry who declined to be identified because they were not authorized to discuss an active investigation.

The commission is examining whether Uber systematically paid women less than men and discriminated against women in the hiring process, among other matters, one of the people said. The Wall Street Journal earlier reported the investigation.

The investigation shows how difficult it has been for Uber to move past its tumultuous 2017. The company faced numerous accusations of workplacesex discrimination and harassment last year, as well as allegations of illegal behavior by its executives, such as spying on and stealing secretsfrom rivals. The scandals forced out Uber’s co-founder and chief executive, Travis Kalanick. His successor, Dara Khosrowshahi, has pledged to reformthe company.

 Last week, The New York Times reported that Uber’s new chief operating officer, Barney Harford, a handpicked deputy of Mr. Khosrowshahi’s, was under scrutiny for making racially insensitive comments. Also last week, Uber’s chief people officer, Liane Hornsey, resigned amid accusations that she improperly handled complaints of racial discrimination at the company.

Read the complete article here.

California’s top court makes it more difficult for employers to classify workers as independent contractors

From today’s Los Angeles Times:

In a ruling that could change the workplace status of people across the state, the California Supreme Court made it harder Monday for employers to classify their workers as independent contractors.

The unanimous decision has implications for the growing gig economy, such as Uber, Lyft and other app-driven services — but it could extend to nearly every employment sector.

In recent years, the hiring of workers as independent contractors — not subject to government rules on minimum wage, overtime and rest breaks — has exploded. A 2016 study by economists at Harvard and Princeton universities estimated 12.5 million people were considered independent contractors, or 8.4% of the U.S. workforce.

The ruling is likely to lead many employers in California to immediately question whether they should reclassify independent contractors rather than face stiff fines for misclassification, employment lawyers said.

“A huge number of businesses will be calling their lawyers saying ‘What should I do?'” said Michael Chasalow, a professor at the USC Gould School of Law.

To classify someone as an independent contractor, the court said, businesses must show that the worker is free from the control and direction of the employer; performs work that is outside the hirer’s core business; and customarily engages in “an independently established trade, occupation or business.”

“When a worker has not independently decided to engage in an independently established business but instead is simply designated an independent contractor … there is a substantial risk that the hiring business is attempting to evade the demands of an applicable wage order through misclassification,” Chief Justice Tani Cantil-Sakauye wrote for the court.

A worker may be denied the status of employee “only if the worker is the type of traditional independent contractor — such as an independent plumber or electrician — who would not reasonably have been viewed as working in the hiring business,” the court said.

Instead, an independent contractor would be understood to be working “in his or her own independent business,” Cantil-Sakauye wrote.

The court offered examples: A plumber temporarily hired by a store to repair a leak or an electrician to install a line would be an independent contractor. But a seamstress who works at home to make dresses for a clothing manufacturer from cloth and patterns supplied by the company, or a cake decorator who works on a regular basis on custom-designed cakes would be employees.

Read the complete article here.

Strategies to Manage Your Career: From Networking to Balancing Work and Life

From the New York Times Business Section:

There is no shortage of books claiming to reveal the secret truth behind successful careers. Then there are all the podcasts, TED talks, late-night motivational speakers and your relatives’ sage advice. The bottom line of most of these advice-givers? A successful career requires managing the person in the mirror – overcoming your tendencies and habits that can undermine efforts to find happiness at work. Read on to see what professors and researchers suggest for managing different situations, whether you want to improve your situation at work, if you suspect changes are coming down, or if you are making a go of it in the gig economy.

Build a Strong Foundation

There are some key fundamentals of building a successful career that you should be aware of whether you are just starting out, or are closing in on retirement.

There are some key fundamentals of building a successful career, whether you are just starting out, or are closing in on retirement. And they apply to all walks of life – if you are a butcher, a baker or a computer systems analyst.

Fair warning, the following tried-and-true strategies will have little impact on what you do every day. They will not necessarily help you meet an assignment due by Friday morning, or complete a to-do list.

Instead, they are foundations that will give you a solid base on which to build a successful career that can withstand unexpected changes. These ideas will also help you put work and career in proper perspective, because there is a lot more to life beyond the daily grind.

The Value of Networking

There’s no getting around it: Networking has an awful reputation. It conjures up images of self-absorbed corporate ladder-climbers whose main interest is, “What’s in it for me?”

But there is almost unanimous agreement among researchers that building and nurturing relationships with people — current and former colleagues and people we respect in the business — provides a strong medium for a vibrant career and a cushion for when the unplanned happens.

Read the complete article here.