Who’s Working in the ‘Gig Economy’? – By  David Crook and  Brian McGill Nov. 23, 2016 12:00 p.m. ET


Freelancers run the gamut from independent contractors to moonlighters

Photo: Drew Angerer/Getty Images

The first major law in the U.S. designed to protect the rights of workers in the “gig economy” was passed by the New York City Council last month. The Freelance Isn’t Free Act requires written contracts and 30-day payment periods for temporary workers, contract workers and independent contractors, and gives the city’s one million freelancers legal recourse to enforce payments. That may be helpful since, according to a survey by the Freelancer’s Union, 70% of “gig economy” workers report being stiffed at one time or another. Here are more findings of that nationwide study.

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Gig economy workers: Independent contractors or indentured servants? – JULIE GUTMAN DICKINSON, CAPITAL & MAIN SATURDAY, JUL 30, 2016 04:30 PM PDT


We need to stop worker misclassification and the abuse of so-called “independent contractors”

Gig economy workers: Independent contractors or indentured servants?

This article originally appeared on Capital & Main.

What if millions of American workers were being denied health insurance, job security and the most basic legal protections, from overtime pay to workers compensation to the right to join a union? What if tens of billions of dollars in taxpayer revenues — money desperately needed to address everything from crumbling roads to education to health care — were never making it to local, state and federal treasuries? What if thousands of companies were violating the law with impunity?

That is exactly what is happening in the United States today, thanks to a rampant practice known as worker misclassification — illegally labeling workers as independent contractors when in fact they are employees under the law. In some cases it’s occurring in plain sight, in others it’s more hidden — but regardless of the circumstances, it is taking an enormous toll on the country.

According to the Economic Policy Institute (EPI), workers misclassified as independent contractors can be found in nearly every industry, and the phenomenon has grown considerably with the rise of the gig economy. Uber, the ride-hailing company, has become the poster child for worker misclassification, with numerous lawsuits alleging that Uber wrongly classifies its drivers as independent contractors. But Uber is hardly alone — examples of worker misclassification can be found in scores of new sectors, from housecleaners to technical workers.

Workers misclassified as independent contractors are also legion in established sectors of the economy, notably residential construction, in-home caregiving and the port trucking industry. Conditions for these workers have been compared to indentured servitude, and for good reason. Misclassification enables employers to get away with widespread wage theft and a range of other illegal practices.

In a 2015 report, EPI described the advantages to employers of misclassifying workers. “Employers who misclassify avoid paying payroll taxes and workers’ compensation insurance, are not responsible for providing health insurance and are able to bypass requirements of the Fair Labor Standards Act, as well as the 1986 Immigration Reform and Control Act.” If this weren’t enough, the report continues, “misclassified workers are ineligible for unemployment insurance, workers’ compensation, minimum wage and overtime, and are forced to pay the full FICA tax and purchase their own health insurance.”

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Judge: California Drivers Can Go Class-Action to Sue Uber – DAVEY ALBA 09.01.15.6:41 PM


A federal judge in San Francisco  has granted class-action status to a lawsuit brought by three Uber drivers against the on-demand ride company.

The decision issued today by US District Judge Edward Chen means as many as 160,000 Uber drivers in California could join the case seeking mileage and tip reimbursement from the company, presently valued at $51 billion. The drivers can now collectively challenge the company on the main issue of worker misclassification—whether drivers should actually be considered employees of Uber under the law rather than independent contractors.

The decision applies to all UberBlack, UberX, and UberSUV drivers who have driven for Uber in the state of California at any time since August 2009. However, it excluded Uber drivers who work for a third-party company and more recent drivers who are bound by Uber’s 2014 arbitration clause. For now, Chen also did not grant class-certification for related expenses, including gas and vehicle maintenance.

“This decision is a major victory for Uber drivers,” says Shannon Liss-Riordan, the Boston lawyer who is representing the Uber drivers in the case.

“It will allow thousands of Uber drivers to participate in this case to challenge their misclassification as independent contractors, as well as to attempt to recover the tips that Uber advertised to customers are included in the fare, but are not in fact distributed to the drivers.”

In arguing against class-action status, Uber tried to show in court that the idea of a typical Uber driver was a false notion, meaning that no individual plaintiffs could truly represent the interests of all drivers.

“We are likely to pursue an appeal of this decision because it is based on several key legal errors,” says attorney Ted Boutrous of Gibson Dunn, the firm defending Uber in the case.

“The mountain of evidence we submitted to the court—including the declarations of over 400 drivers from across California—demonstrates that two plaintiffs do not and cannot represent the interests of the thousands of other drivers who value the complete flexibility and autonomy they enjoy as independent contractors.”

The Future of On-Demand

Judge Chen’s ruling comes as the debate around how to properly classify workers for on-demand companies is heating up. As startups like Uber and Instacart have gone mainstream, so have criticisms of the so-called 1099 economy. These startups often employ freelance contractors, a classification the companies contend is desirable because the work is more flexible than a regular 9-to-5 job. Some critics are calling for broader protections for these workers, who do not receive benefits like Social Security, Medicare, and workers’ compensation and cannot unionize. Others complain that classifying workers as contractors allows companies like Uber to save up to 30 percent of payroll tax costs, which gives them an unfair competitive advantage.

 

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