Unions, gig-econ­omy firms gear up for New York ben­e­fits bat­tle

Kuwait Times - - BUSINESS -

Faced with a bar­rage of law­suits from work­ers de­mand­ing ben­e­fits and recog­ni­tion as em­ploy­ees, some com­pa­nies in the fast­grow­ing ‘gig econ­omy’ are look­ing to set­tle the is­sues through leg­is­la­tion. Joseph Morelle, the num­ber two Demo­crat in the New York State As­sem­bly, said he has been talk­ing about por­ta­ble ben­e­fits with such com­pa­nies, which use oc­ca­sional work­ers to pro­vide rides, de­liv­er­ies, house-clean­ing and other ser­vices through web­sites and apps.

He said he plans to in­tro­duce leg­is­la­tion early next year, which would be the first of its kind in the United States and is likely to draw scru­tiny from or­ga­nized la­bor. In ad­vance of that ef­fort, on­line home-clean­ing com­pany Handy has cir­cu­lated a draft bill, seen by Reuters, that would es­tab­lish guide­lines for a por­ta­ble ben­e­fits plan for New York work­ers at gig-econ­omy com­pa­nies. A key el­e­ment of the draft bill is that it clas­si­fies work­ers at com­pa­nies choos­ing to par­tic­i­pate in the pro­gram as in­de­pen­dent con­trac­tors rather than em­ploy­ees un­der state law, as long as the com­pa­nies’ deal­ings with their work­ers meet cer­tain cri­te­ria.

Morelle would not say whether his pro­posed law would be based on the draft bill cir­cu­lated by Handy, only that he was fo­cused on pass­ing some form of leg­is­la­tion to ad­dress the is­sues it raises. “The gig econ­omy is some­thing more and more peo­ple will grav­i­tate to­wards, and we clearly want to make sure they can get ben­e­fits,” he said.

EM­PLOY­EES OR CON­TRAC­TORS?

Handy, ride-hail­ing ser­vice Uber Tech­nolo­gies Inc and other com­pa­nies in the van­guard of the gig econ­omy - also known as the ‘shar­ing’ or ‘onde­mand’ econ­omy - have ig­nited a na­tional de­bate about how to clas­sify and pro­vide ben­e­fits to peo­ple who work flex­i­ble sched­ules and ir­reg­u­lar hours.

Sev­eral la­bor unions and some of the work­ers them­selves have ar­gued they should be con­sid­ered em­ploy­ees, and there­fore en­ti­tled to guar­an­teed wages, em­ployer-pro­vided in­sur­ance and other ben­e­fits. The com­pa­nies have main­tained their work­ers are in­de­pen­dent con­trac­tors. Court ac­tions brought by work­ers at Handy, Uber and other sim­i­lar firms hop­ing to es­tab­lish them­selves as em­ploy­ees have not been fi­nally re­solved. If New York law­mak­ers move for­ward, they would be the first in the na­tion to au­tho­rize in­dus­try-wide por­ta­ble ben­e­fits, and could serve as a model for other states, par­tic­u­larly if a bill draws sup­port from or­ga­nized la­bor.

The leg­is­la­tion could also make it more dif­fi­cult for work­ers at gig-econ­omy com­pa­nies to con­vince courts they should be con­sid­ered em­ploy­ees. The draft bill cir­cu­lated by Handy re­quires par­tic­i­pat­ing com­pa­nies to con­trib­ute at least 2.5 per­cent of the fee for each job to an in­di­vid­ual ac­count for the worker, which he or she could then use to buy health in­sur­ance or other ben­e­fits.

On its web­site, Handy says its “top pro­fes­sion­als” make more than $1,000 per week. Un­der the terms of the draft bill, Handy would be re­quired to con­trib­ute at least $1,300 per year for ben­e­fits for work­ers mak­ing $52,000 per year. Com­pa­nies would be al­lowed to pass along the cost to their cus­tomers. Since work­ers at par­tic­i­pat­ing com­pa­nies would be clas­si­fied as in­de­pen­dent con­trac­tors, they could not join unions to col­lec­tively bar­gain for bet­ter ben­e­fits.

Larry En­gel­stein, ex­ec­u­tive vice pres­i­dent of 32BJ Ser­vice Em­ploy­ees In­ter­na­tional Union (SEIU), which rep­re­sents thou­sands of jan­i­tors, said un­der con­tracts the union ne­go­ti­ates em­ploy­ers con­trib­ute an an­nual av­er­age of $18,000 per em­ployee for health­care costs.

“The amount of money that’s sup­posed to be put into these por­ta­ble ben­e­fit funds seems so mea­ger,” En­gel­stein said. “The ac­tual ben­e­fit a worker is get­ting hardly war­rants what the worker is giv­ing up.” The SEIU is a backer of the fouryear-old “Fight for $15” cam­paign, which aims to raise pay and ex­pand the right to join a union for low-wage work­ers in­clud­ing fast-food servers, home care aides, air­port bag­gage han­dlers and others. For the first time on Tues­day, some Uber driv­ers plan to join the cam­paign’s protests. A source fa­mil­iar with the Handy pro­posal said it was meant to be a start­ing point for dis­cus­sions, not a fi­nal bill. In a state­ment, Handy said “it’s our view we need both reg­u­la­tory change to clar­ify the law, and we are in fa­vor of some form of por­ta­ble ben­e­fits.” Uber and Morelle de­clined to comment on the Handy pro­posal. Morelle said he plans to draft the bill next month and in­tro­duce it in Jan­uary. —Reuters

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