Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Independent Contractors’

Trump’s administration considers rule that would make it easier for businesses to exploit workers

Wednesday, February 6th, 2019

The U.S. Department of Labor plans to propose a rule that would reexamine worker classification, redefining who is given certain labor protections and who is not.

The boom of the so-called gig economy — as seen in ridesharing apps like Uber and Lyft and others like TaskRabbit and DoorDash — have raised questions about whether people providing these services should be classified as entrepreneurs or as workers.

Paul Secunda, professor of law at Marquette University, said the motivation for an employer-friendly Department of Labor to explore worker classification is very clear.

“Obviously employers want as many workers as possible to be independent contractors for the reasons that they don’t have to pay benefits, they are not subject to employment laws, and are at a real disadvantage bargaining with their employers,” Secunda said.

Secunda said such a rule would have profound effects on workers.

“It almost comes across as arcane and who cares? But if you can’t be considered to be an employee then all these laws are beyond your reach. You can’t organize. You can’t get minimum wage or overtime. You can’t get the protections of employment discrimination law. You can’t get consumer protections when it comes to pensions and health insurance. It’s really damaging. Those in the Trump administration, who are pro-business in a way that I don’t know we’ve ever seen before, are focused on it as a way to make it less expensive for these large companies to have labor and not pay for it.”

Bloomberg Law broke the news that the department would be looking at the issue after a spokeswoman told the outlet it will update the joint employer rule and then look at worker classification.

There are different tests and factors to determine whether a worker is an employee or contractor. The National Labor Relations Act uses what is known as a common law definition based on how much control the employer has over the worker, including factors such as bringing your own tools to a job, whether you get a W-2 or Form 1099, and how much direction you receive on how to provide the service or product.

Under the Fair Labor Standards Act, which the Labor Department administers and enforces, there is an economic realities test that asks how dependent someone is on the employer in question. The more dependent the person is, the more likely that person is an employee and not an independent contractor.

In January, the National Labor Relations Board (NLRB) ruled that the transportation service SuperShuttle was correct to call its airport van drivers contractors instead of employees. The NLRB said it was considered entrepreneurial opportunity since workers set their own schedules and have their own work vans.

Secunda said the ruling was a “radical departure” from the common law definition of employee that has been used under the NLRA for decades.

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“They’ve added a new factor called entrepreneurial opportunity which is nowhere to be found in any of the list of factors I’ve ever seen for the common law control. You could argue that some of these factors hint at such entrepreneurial control but it’s never been either discussed as the centerpiece of the test as it was in the SuperShuttle case nor has so much emphasis been put on it as it was in the SuperShuttle case,” Secunda said. “It is not just happenstance that this case was decided by the NLRB and then in the regulatory agenda you see the Department of Labor is thinking of trying to eventually change the definition or factor test in a way that is not surprisingly going to favor employers.”

One in five Americans is a contract worker, so the debate over who is an employee or contractor will only grow in importance. People who are considered freelancers, on-call workers, temp agency workers, and contractors increased from 10.5 percent to 15.8 percent between 2005 and 2015, according to Harvard and Princeton economists.

“It’s hard to believe people are running businesses working 60 hours a week and making $10,000 a year. It doesn’t sound like a good entrepreneur to me. It sounds like an employee who is being exploited.”

Many of these workers have pursued lawsuits in the past few years. A part-time driver sued Grubhub in 2015 and argued that he that was entitled to minimum wage, overtime pay, and reimbursement of expenses, since the company had a lot of control over his schedule. But last year, a U.S. District Court judge disagreed and said that because he never went through training, wore a uniform, or received performance evaluations, he wasn’t a traditional employee.

A federal judge ruled last year that Uber doesn’t have enough control over Uber Black, a limo service, to be considered an employer under the FLSA, since drivers are free to run personal errands, take naps, and smoke cigarettes between rides. In 2017, DoorDash, a food delivery company, reached a settlement with workers after they said they were misclassified as independent contractors. Although the agreement provided more protections for workers and clearer policies, it did not result in a change in worker status.

The online gig economy is “growing rapidly,” economists Seth D. Harris and Alan Krueger explain in a 2015 report on the modernizing labor laws. Harris and Krueger propose that there be a new legal category of workers called independent workers for people like Lyft drivers, who are neither traditional employees or independent contractors, since they have similarities to both categories. Although they can, in theory, choose when and whether to work, there are restrictions imposed by the company on how much they can charge customers. They suggest “extending many of the legal benefits and protections found in employment relationships to independent workers.”

Secunda said that although the department will likely argue that these workers are entrepreneurs, there isn’t necessarily evidence to suggest that is how they should be characterized. Due to low pay, some drivers work extraordinarily long shifts.

“I think their entire emphasis here, entrepreneurial opportunity, brings the gig workforce into play,” Secunda said. “That term micro-entrepreneur — the idea that these people who are running their own little businesses — it’s hard to believe people are running businesses working 60 hours a week and making $10,000 a year. It doesn’t sound like a good entrepreneur to me. It sounds like an employee who is being exploited. But that’s their argument.”

This possible change would come after recent victories for businesses. In December, a federal appeals court ruled that an Obama-era standard that says joint employers can be held responsible for labor law violations and must bargain with contract workers’ unions was too broad. McDonald’s has been one of the companies at the center of this issue, after workers filed 291 complaints accusing the company of retaliation for a strike in the form of reduced work hours, disciplinary actions, and interrogations.

In September, the National Labor Relations Board issued a business-friendly proposed rule for an updated standard on joint employer status under the National Labor Relations Act. Under this rule, an employer is a joint employer “only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and… in a manner not limited and routine.”

The Labor Department plans to update the joint employer rule soon. The Labor Department has also recently moved to encourage states to conduct drug tests for people seeking unemployment insurance, which labor experts say would accomplish nothing but humiliation and more hoops for low-income people seeking relief.

Meanwhile, House Democrats are focusing on the Labor Department’s handling of its proposed tip-pooling rule, after reports that the department moved to hide findings that the rule would rob workers of billions of dollars every year. On Friday, Reps. Bobby Scott (D-VA), Keith Ellison (D-MN) Mark Takano (D-OR), and Suzanne Bonamici (D-OR) askedfor all economic analyses of the rule. Democrats have also called for an investigation into Labor Secretary Alexander Acosta after a Miami Herald report on his role in securing a plea deal for multimillionaire financier Jeffrey Epstein, who was able to avoid prison despite allegations that he sexually abused dozens of girls.

This article was originally published at ThinkProgress on February 6, 2019. Reprinted with permission. 

About the Author: Casey Quinlan is a policy reporter at ThinkProgress covering education and labor issues. Their work has also been published in The Establishment, Bustle, Glamour, The Guardian, and In These Times.

Secunda said that although the department will likely argue that these workers are entrepreneurs, there isn’t necessarily evidence to suggest that is how they should be characterized. Due to low pay, some drivers work extraordinarily long shifts.

“I think their entire emphasis here, entrepreneurial opportunity, brings the gig workforce into play,” Secunda said. “That term micro-entrepreneur — the idea that these people who are running their own little businesses — it’s hard to believe people are running businesses working 60 hours a week and making $10,000 a year. It doesn’t sound like a good entrepreneur to me. It sounds like an employee who is being exploited. But that’s their argument.”

This possible change would come after recent victories for businesses. In December, a federal appeals court ruled that an Obama-era standard that says joint employers can be held responsible for labor law violations and must bargain with contract workers’ unions was too broad. McDonald’s has been one of the companies at the center of this issue, after workers filed 291 complaints accusing the company of retaliation for a strike in the form of reduced work hours, disciplinary actions, and interrogations.

In September, the National Labor Relations Board issued a business-friendly proposed rule for an updated standard on joint employer status under the National Labor Relations Act. Under this rule, an employer is a joint employer “only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and… in a manner not limited and routine.”

The Labor Department plans to update the joint employer rule soon. The Labor Department has also recently moved to encourage states to conduct drug tests for people seeking unemployment insurance, which labor experts say would accomplish nothing but humiliation and more hoops for low-income people seeking relief.

Meanwhile, House Democrats are focusing on the Labor Department’s handling of its proposed tip-pooling rule, after reports that the department moved to hide findings that the rule would rob workers of billions of dollars every year. On Friday, Reps. Bobby Scott (D-VA), Keith Ellison (D-MN) Mark Takano (D-OR), and Suzanne Bonamici (D-OR) askedfor all economic analyses of the rule. Democrats have also called for an investigation into Labor Secretary Alexander Acosta after a Miami Herald report on his role in securing a plea deal for multimillionaire financier Jeffrey Epstein, who was able to avoid prison despite allegations that he sexually abused dozens of girls.

Trump labor board declares open season on 'independent contractors' this week in the war on workers

Tuesday, February 5th, 2019

The Donald Trump-appointed National Labor Relations Board dealt a major blow last week to workers being exploited by companies misclassifying them as independent contractors. Whether a worker is an employee has long been determined by a number of factors, including how much control the employer exerts over things like work hours and conditions. The NLRB, though, looked at SuperShuttle drivers in Dallas-Fort Worth who have to buy the exact van that SuperShuttle wants, pay a series of fees to SuperShuttle, use company dispatchers, and be monitored by SuperShuttle GPS tracking, and decided that they are legitimately independent contractors and not employees because something something “entrepreneurial opportunity.” Moshe Marvit has the gory details:

Throughout the Board majority’s decision, it becomes clear that when it uses the language of “freedom” and “entrepreneurial opportunity,” it is the freedom to fail and the opportunity to lose. Reading the decision, one is struck by the lack of any evidence that the drivers—or “franchisees” in the language of the case—do well under the agreement. Instead, the Board majority approvingly cites the NLRB Acting Regional Director who made the first determination in the case, in which she found that “franchisees face a meaningful risk of loss in light of the substantial costs that go into owning a franchise, i.e. the vehicle payments, weekly system fees, insurance costs, gas, maintenance, licensing fees, and tolls.” The Board methodically goes through every instance where the company has offloaded costs and risks to the drivers, while maintaining strict control, and calls the new relationship one where the drivers are small business owners, experiencing freedom and entrepreneurial opportunity.

Basically the NLRB served notice that there may be no employment relationship so exploitative that it declines to affirm it as independent contracting.

This blog was originally published at Daily Kos on February 2, 2019. Reprinted with permission. 

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

L.A. Port Strike Today Over Federal Contractor Wage Theft

Thursday, November 3rd, 2016

dave.johnson

 

“An order that creates a culture of legal compliance could have a transformative impact on American industry.” George Faraday, Legal and Policy Director at Good Jobs Nation

 

Truck drivers and warehouse workers working for federal contractors at the Port of Los Angeles are striking for 48 hours to draw attention to wage theft and other violations. These workers work for companies that contract with the federal Department of Defense. They say they have been misclassified as “independent contractors”, had their wages stolen and have been retaliated against for exercising the right to organize.

The workers are doing this because President Obama’s Fair Pay & Safe Workplaces Executive Order protecting low-wage workers on federal contracts from wage theft and other labor law violations takes effect today. Contractors are supposed to start reporting whether they are found in violation of wage theft and other labor laws and regulations. Later the government can use this information in the decision process for awarding contracts.

On a press call discussing today’s strike, Jaime Martinez, a port worker, explained that he has worked for K&R, a federal contractor, for 19 years. “We are on strike today for issues including respect and and wage theft. We earn very low wages, with no benefits and no workers compensation because we are classified as independent contractors.”

Obama’s Fair Pay and Safe Workplaces Executive Order

July’s post, Obama’s ‘Fair Pay and Safe Workplaces Executive Order’ explained,

President Obama’s executive order cracks down on federal contractors who break hiring, health and safety, and wage laws. It also prohibits employers from requiring mandatory arbitration agreements with employees of federal contractors, in order that workers can get their day in an actual court instead of being forced to appear in front of an arbitrator picked and paid for by the company when there is a dispute involving the Civil Rights Act or related to sexual assault or harassment.

Specifically, the new rules require companies that bid on federal contracts to disclose wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights violations from the prior three years. Federal contractor hiring officers are to take serious violations into account before awarding contracts. These officers will be issued guidelines on whether certain violations “rise to the level of a lack of integrity or business ethics.”

This Is A Big Deal

According to Good Jobs Nation this will affect a large number of workers around the country,

  • A U.S. Senate investigation revealed that federal contractors were responsible for nearly one-third of the largest U.S. Department of Labor penalties for wage theft and other legal violations;
  • A report by the National Employment Law Project found that 1 in 3 low-wage federal contract workers are victims of wage theft; and
  • An analysis by the Government Accountability Office showed that known legal violators have continued to receive lucrative federal contracts because of lax government oversight and enforcement.

“Creates A Culture Of Legal Compliance”

Companies with federal government contracts employ 1 in 4 American workers. Thanks to this executive order they will have to demonstrate a record of labor law compliance, including wage and hour and health and safety laws. On the press call discussing today’s strike Good Jobs Nation’s Legal and Policy Director George Faraday said, “An order that creates a culture of legal compliance could have a transformative impact on American industry.”

Fair Pay Hotline And Website

Also today, Good Jobs Nation is launching the first-ever national legal hotline – 1-844-PAY-FAIR – for federal contract workers to report law-breaking. Information is also available at goodjobsnation.org/payfair,

If you are a worker on a federal contract and you believe that are not receiving the pay and benefits owed to you under federal laws – like the Service Contract Act or the Davis Bacon Act – contact Good Jobs Legal Defense at 1-844-PAY-FAIR or click below.

This post originally appeared on ourfuture.org on October 25, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

 

Seattle City Council Votes That Uber and Lyft Drivers Can Unionize

Wednesday, December 16th, 2015

LauraClawsonCompanies like Uber and Lyft consider their drivers to be “independent contractors,” which is all about freedom—specifically, the company’s freedom to not pay for things like workers comp, unemployment, or even the minimum wage. That’s a system facing significant court challenges in some places, and now another form of challenge in Seattle. The Seattle City Council on Monday night passed a bill giving drivers union rights.

Under the bill passed Monday, “for-hire drivers” would be legally entitled to seek out “exclusive driver representatives” for the purpose of collective bargaining — i.e., labor unions. If a majority of drivers at a particular company designate a union as their representative, then by law the company will have to bargain with the union within the city of Seattle.

The law has implications well beyond Uber and Lyft. Many traditional taxi drivers are classified as independent contractors as well, and would have new rights under the law.

At least, they would if the law ever goes into effect. Uber and others in the industry are expected to challenge the law in two possible ways: by claiming that it conflicts with federal labor law, and by arguing that it runs afoul of antitrust law.

Seattle Mayor Ed Murray said he won’t sign the law, but he can’t block it. Despite the delays the law will face thanks to legal challenges, the pressure is growing—on multiple fronts—for Uber and Lyft and other gig economy companies to quit using the weakness of American labor law to exploit their workers.

This blog originally appeared in DailyKOS.com on December 15, 2015. Reprinted with permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006  and Labor editor since 2011.

Why the Sharing Economy is Hurting the Economy - and What Must Be Done

Sunday, November 29th, 2015

Robert ReichIn this holiday season it’s especially appropriate to acknowledge how many Americans don’t have steady work.

The so-called “share economy” includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

It’s estimated that in five years over 40 percent of the American labor force will be in such uncertain work; in a decade, most of us.

Already two-thirds of American workers are living paycheck to paycheck.

This trend shifts all economic risks onto workers. A downturn in demand, or sudden change in consumer needs, or a personal injury or sickness, can make it impossible to pay the bills.

It eliminates labor protections such as the minimum wage, worker safety, family and medical leave, and overtime.

And it ends employer-financed insurance – Social Security, workers’ compensation, unemployment benefits, and employer-provided health insurance under the Affordable Care Act.

No wonder, according to polls, almost a quarter of American workers worry they won’t be earning enough in the future. That’s up from 15 percent a decade ago.

Such uncertainty can be hard on families, too. Children of parents working unpredictable schedules or outside standard daytime working hours are likely to have lower cognitive skills and more behavioral problems, according to new research.

What to do?

Courts are overflowing with lawsuits over whether companies have misclassified “employees” as “independent contractors,” resulting in a profusion of criteria and definitions.

We should aim instead for simplicity: Whoever pays more than half of someone’s income, or provides more than half their working hours should be responsible for all the labor protections and insurance an employee is entitled to.

In addition, to restore some certainty to people’s lives, we need to move away from unemployment insurance and toward income insurance.

Say, for example, your monthly income dips more than 50 percent below the average monthly income you’ve received from all the jobs you’ve taken over the preceding five years. With income insurance, you’d automatically receive half the difference for up to a year.

It’s possible to have a flexible economy and also provide workers some minimal level of security.

A decent society requires no less.

This blog was posted at RobertReich.org at November 23, 2015. Reprinted with permission.

About the Author: Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century.

DOL Decision Could Mean the End of Wage Theft Through “Independent Contractor” Misclassification

Monday, July 27th, 2015

David MobergAre you an employee?

It seems like a simple question that must have a simple answer for most people. But definitions in different laws and rulings enforcing the laws vary. And that variation provides an opening for a growing number of employers to cheat governments of taxes and workers of income, benefits and protections by misclassifying their employees, especially as “independent contractors.”

Last week, the administrator of the Department of Labor’s Wage and Hour Division, David Weil, released a “letter of guidance” that clarifies who is an employee and who is an “independent contractor”—that is, essentially an individual running his or her own business. He argues that the most definitive statement from Congress comes from the Fair Labor Standards Act, which says that “to employ” means “to suffer or permit to work.” And, he concludes, “under the Act, most workers are employees.”

The decision is “incredibly important,” says Catherine Ruckelshaus, general counsel and program director of the National Employment Law Project (NELP), a pro-worker nonprofit organization, and may help to clear up confusion in the courts and encourage more enforcement of the law.

In recent years, many companies—from 10 percent to 30 percent or more of employers—employ at least several million people who are misclassified as independent contractors, according to a recent NELP report. They even go so far as to require workers to form a limited liability corporation or franchise (with themselves as the one and only participant) or to sign contracts declaring that they are independent contractors. According to another study from economist Jeffrey Eisenach of George Mason University, the number of independent contractors rose by one million from 2005 to 2010, including both fake and real contractors (often unemployed workers who re-label themselves as “consultants”).

One high-profile example is the Federal Express delivery driver—who wears a FedEx uniform, drives a company truck, follows a route set by the company and still is treated as a contractor. Weil’s ruling may also tip the judgment against companies like the Uber taxi service, increasingly targeted in lawsuits as improperly treating its drivers as independent contractors.

When employers misclassify workers, they often pay less for contractors, but most important, the workers lose a wide range of protections and benefits under the law such as unemployment compensation, workers’ compensation, minimum wage and overtime regulations, and governments lose billions of dollars a year in taxes that support those programs.

In his recent book The Fissured Workplace, Weil argues that workplace phenomena like subcontracting, using independent contractors, franchising and other ways to make employers less responsible for their employees is not just a result of competition driving down costs, whether as a result of globalization, weakening of unions, new technologies or new work processes, but also “pressure from public and private capital markets to improve returns.”

Unlike the “common law” test for who is an employer, which emphasizes the degree of control over one’s work, the FLSA standard usually relies on an “economic realities” test, which examines many different dimensions of work without favoring one above all others. But in his guidance letter, Weil writes, “the ultimate inquiry under the FLSA is whether the worker is economically dependent on the employer or truly in business for him or herself.” But the varied economic realities tested include such questions as how integral the worker is to the business, how much does managerial skill affect possible profit or loss, how big is the worker’s relative investment, does the worker’s success rely on special business skills in addition to any technical skills, what kind of control does the employer exercise, or how permanent is the relation of the worker to the employer.

The impact of this guidance letter may first be felt in courtrooms and in various federal or state agencies, but Ruckelshaus hopes that employers will voluntarily take it seriously. More likely, it will only be quite meaningful if there are systematic state and federal efforts to audit employer behavior, especially in industries where abuses are common, such as lower-skill construction, home care and janitorial work. Unions are also in a position to push for more vigorous enforcement, as Ruckelshaus said the Carpenters have been.

And when it is clear that the workers are not contractors but employees, the unions can do the workers a favor and invite them to join the union.

This blog was originally posted on In These Times on July 22, 2015. Reprinted with permission.

About the Author: The author’s name is David Moberg. David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at davidmoberg@inthesetimes.com.

The End of Jobs?

Monday, March 24th, 2014

sarah jaffeIn a major victory for a long-running campaign,  port truck drivers at Pacific 9 Transportation in California have won the right to be considered employees under the National Labor Relations Act, and to form a union.

That ruling, by Region 21 of the National Labor Relations Board, that the truckers had been misclassified as “independent contractors”   comes after months of sustained actions, including strikes, by port truckers.  It comes in an industry where union jobs were the standard until deregulation turned all workers into “free agents.” Free agency, they quickly found, didn’t come with much freedom, as they still had their hours and working conditions dictated by the company for whom they worked–but it came with a price tag. The cost of gas, truck maintenance and licenses landed on their shoulders instead of their employers’.

It’s in this context that I’m thinking about the “end of jobs as we know them.”

This Wednesday I attended a conference with that provocative title at the Open Society Foundation, and I’ve long been mulling the idea.

In 2011, I wrote at AlterNet that a future beyond jobs, where we all work less, used to be a major goal of the U.S. labor movement. More freedom, less production for its own sake, would actually create a more sustainable world. (Alyssa Battistoni compellingly made this argument recently at Jacobin.) Lowering the amount of hours worked by each person would help distribute jobs better among the people who still don’t have them, as economist Dean Baker has repeatedly argued.

But I noted that moving beyond jobs would necessitate tackling issues of inequality and concentration of power in the hands of the wealthy. At the moment, the “end of jobs” has meant sustained high unemployment and low wages, not more freedom. The disappearance of jobs in America has as much to do with the power of global capital to move where and when it wants and the ability, post-crisis, of businesses to squeeze more and more productivity out of the few workers they keep, as it does with technology making certain professions obsolete. And the rise of the “free agent” worker has at least as much to do with the desire of businesses to have an easy-hire, easy-fire, just-in-time workforce (as I wrote about in some detail recently) that absorbs—as the port truckers do—most of the labor costs, as it does with workers who simply enjoy the freedom of not having a boss. Power is as big or bigger a force as technology in shaping the labor landscape today.

Fast forward to 2014. The economy has improved only slightly. Unemployment remains high, and the jobs that do exist are often low-wage and part-time. Since 2011, we’ve seen not only Occupy but the rise of a movement of Walmart and fast-food workers demanding better wages and, often, more hours, so they can take home a full-time paycheck. A shorter hours movement has not materialized, nor has a meaningful jobs program, despite the promises of a bipartisan clutch of politicians. The minimum wage has risen in some states and cities, but workers are still struggling, and the long-term unemployed have seen their benefits cut off by a Congress that continues to squabble about whether or not they deserve to be able to pay bills.

Jobs have not yet ended or become obsolete. Yet, without question, they are changing. Research from Kelly Services (which, being a temporary agency, certainly has a vested interest in the subject) finds that 44 percent of workers in the U.S. classify themselves as “free agents.” According to the Freelancers Union, 42 million people are freelancers. The full-time job itself is only a fairly recent development in human history, spanning a couple hundred years or so, and the attendant expectation that a job be “good,” paying a living wage and providing healthcare and retirement benefits, with a union and some security, is a peculiar historical development of the New Deal era in the United States—an era that is almost without question over.

Power created that era—the power of organized workers in unions demanding better conditions. But the bosses, it’s worth noting, never stopped trying to dismantle the deal. Since the Taft-Hartley Labor Management Relations Act of 1947, conservatives have been pushing to limit the power workers were granted by the NLRA in 1935, and the conversion of decent jobs into no-security temp gigs should rightly be seen in that context. The port truck drivers at Pacific 9 and elsewhere realize that despite the promises of freedom and liberation, they have more power when their relationship with the boss is explicit and when they can come together as a union.

We should carefully consider what comes next, whether that be high-end freelancers hopping from gig to gig, disdaining a full-time job, or more likely, the further fragmentation into piecework that we see happening in digital spaces like Amazon’s Mechanical Turk, and the conversion of formerly full-time union jobs such as port trucking or auto manufacturing into low-security independent contracting or temp labor. Moshe Marvit wrote at The Nation of Amazon’s human “crowdworkers” who perform the tiny tasks that are “helping to power the parts of the Internet that most of us take for granted” and who are paid a pittance for their work.

Technology is often blamed for displacing workers and eliminating jobs. Those doing the blaming are sometimes correct, as when supermarkets move to automatic checkout or ports move to automated cargo hauling. And yet the story of the Mechanical Turkers is a good cautionary tale for those who assume that all jobs are disappearing into the mechanical ether. One doesn’t have to be a Luddite to point out that many jobs—including ones, like those done by Turkers, that we think are fully automated—are still being done by people, either because we don’t have the technology to do them yet, or because those people remain cheaper than machines. Whether jobs are disappearing for good reasons—because they simply aren’t socially necessary anymore—or because they are being fragmented, made temporary or shifted to freelancers, these are not processes that are happening outside of human control, but rather because of it.

Carl Benedikt Frey of the Oxford Martin Programme on the Impacts of Future Technology was a keynote speaker at Wednesday’s event. His recent study, with Michael Osborne, found that nearly half of U.S. jobs are “at risk of computerization.” These include positions in a wide variety of sectors, from transportation to the service industry.

The positions that are least likely to be automated, this study found, were those that relied on “creative and social intelligence”—for example, preschool teaching. It concludes, “For workers to win the race, however, they will have to acquire creative and social skills.”

What is social intelligence but another word for what sociologist Arlie Russell Hochschild called “emotional labor”? And that emotional labor has been devalued and indeed not considered a skill at all, largely because it has been done by women. One study found that “interactive service jobs,” which include care work and service work, get paid less even if you control for education levels, rate of unionization, cognitive and physical skill, and the amount of women doing the job.

If those social-skilled jobs are the only ones that will be left to us, will we learn to value them more? Or will this just be another excuse to pay workers less? The question, like the question of what is a skill in the first place, is one of power.

The end of jobs doesn’t have to be a dystopian nightmare. There is some truth to the rosy picture painted by Kelly Services about the “free agent” workforce. I once left a full-time job to be a freelancer, and I enjoyed the experience: writing for a variety of outlets, learning from new editors, sharpening different styles, working when I wanted. The pleasure came to a grinding halt, though, when a client who owed me what amounted to more than two months of my rent didn’t pay for several months, and I had few other financial options. I needed a way to pay the bills if the work didn’t come through, and our current so-called social safety net didn’t offer one. It remains designed, as Sara Horowitz of the Freelancers’ Union points out, for a workforce that has full-time jobs with benefits. And that was never everyone, to begin with.

Women, black workers and immigrants were mostly left out of that design in the first place; what’s happened is that the conditions in the sectors where they typically work (temporary work, no labor protections, informal workplaces) have caught up with the rest of us. This means instead of clinging to a safety net that was designed for white male breadwinners in manufacturing jobs, we need a system designed for workers who are doing less work, doing it from home or the neighborhood coffee shop, and where the human resource in demand is care as much as it is cognitive skill or brute strength.

The subject of a universal basic income is coming up a lot these days; former Labor Secretary Robert Reich endorsed it last week in a talk at San Francisco State University, calling it “almost inevitable” in the face of technologically-induced job loss. A basic income would serve as something more than a safety net in troubled times—it would be a firm line below which no one, employed or unemployed, skilled or unskilled, could fall. Perhaps most importantly, it would help workers who do retain jobs (or gigs) increase their bargaining power by giving them the option of leaving rather than clinging to a job out of desperation.

That’s a large redistribution of income, of course, and it will take a lot of political power to make such a thing a reality. Political power for working people has come in the past and will come in the future through worker organizing—particularly, as has been the case with the port truckers, organizing outside of the old NLRB framework. It took workers coming together to challenge their bosses’ idea of “freedom” to win fair pay at the ports, and it will take workers coming together on a massive scale to really get workers some freedom.

Along with that idea of freedom, it’s time to consider a call for shorter working hours—a redistribution of work and leisure to go along with the redistribution of wealth. There will always to be some work that cannot be automated away, and much of that work, as Frey and Osborne found, will likely rely on social skills that have been presumed to be women’s domain. If we don’t want a world where women do most or all of the work for little pay, we’ll have to start valuing those social skills more, and ensuring that the jobs that requires them are done by all.

But most importantly, we should be working to ensure that a future without jobs is a future where we all get to enjoy the benefits of free time.

This article was originally printed on Working in These Times on March 21, 2014.  Reprinted with permission.

About the Author: Sarah Jaffe is a staff writer at In These Times and the co-host of Dissent magazine’s Belabored podcast. Her writings on labor, social movements, gender, media, and student debt have been published in The Atlantic, The Nation, The American Prospect, AlterNet, and many other publications, and she is a regular commentator for radio and television.

New Law Ups the Ante Significantly for California Employers Who Are Caught Misclassifying Employees As Independent Contractors

Tuesday, October 18th, 2011

Brad Yamauchi

Kevin AllenBackground

One common strategy used by companies to cut labor costs is to classify as much of its work force as “independent contractors” as possible. A company does not have to pay payroll taxes for independent contractors nor does it have to worry about pesky labor code requirements pertaining to minimum wages, overtime, meal and rest breaks, or expense reimbursement requirements. Additionally, a company does not have to cover independent contractors under workers’ compensation insurance, and is not liable for payments under unemployment insurance, disability insurance, or social security.

Given these cost savings, it should, perhaps, not be surprising that there has been a trend in companies classifying more of their workforce as independent contractors. A 2007 study by the General Accounting Office estimated that the number of workers classified as independent contractors rose by almost two million between 1995 and 2005 alone.

However, just calling someone an independent contractor does make it so and many companies do so without considering the legal distinctions between employees and independent contractors. Indeed, there is a presumption that workers are employees (Labor Code Section 3357) and a company that wishes to rebut this presumption will be required to undergo a multi-factor test which includes questions regarding whether the company has control, or the right to control, how the work is done and the manner and means by it is performed. See, S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341. If they are unable to do so, then the worker will be classified as an employee and the company will potentially be on the hook for four years of overtime wages, meal and rest premiums, etc.

The New Law

S.B. 459 was chaptered by California’s Secretary of State as Chapter 706, Statutes of 2011. It will appear as Sections 226.8 and 2753 of the California Labor Code. The new law:

  • Prohibits the “willful misclassification” which is defined as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”
  • Prohibits charging a misclassified individual “a fee or making any deductions from their compensation for any purpose, including for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual’s employment where any of the acts… would have violated the law if the individual had not been misclassified.”
  • Subjects violators to dramatic civil penalties of at least $5,000 and as much $15,000 per violation, in  addition to any other penalties or fines permitted by law. Violators who are determined to have engaged in a  pattern of violations are subject to a civil penalty of at least $10,000 and as much as $25,000 per violation.
  • Gives the Labor and Workforce Development Agency authority to assess penalties and includes special requirements for licensed contractors subject to the Contractors’ State License Board.
  • Subjects non-lawyers who advise an employer to misclassify a worker to joint and several liability with the employer.

Although independent contractor misclassification cases are nothing new, the new law will lead to an increase in such lawsuits. Perhaps the most significant change is the addition of the new penalties. To wit, a company engaged in 100 violations could be liable for $2,500,000 in penalties under the new statute, in addition to the existing remedies (such as attorney’s fees and costs under Labor Code Section 218.5, penalties under Labor Code Section 203 and 226, interest).

The bottom line– Companies should think twice before misclassifying their work force to avoid paying employees premium wages and avoid payroll taxes!

About the authors:Brad Yamauchi is a partner and Kevin Allen is a litigation associate at Minami Tamaki LLP in San Francisco, California.  The firm has litigated individual and class action wage and hour, civil rights and financial and consumer fraud cases for 35+ years. It is currently handling class action misclassification claims in the hi-tech, restaurant, retail, communications and trucking industries on behalf of thousands of employees.

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