Cut­ting cor­ners at Live Na­tion

Los Angeles Times - - BUSINESS - MICHAEL HILTZIK

Brian Hill is a 28-year-old stage­hand from At­lanta who’s been plan­ning to ad­dress Wed­nes­day’s an­nual share­hold­ers meet­ing of the gi­ant Bev­erly Hills-based con­cert pro­mo­tion firm Live Na­tion En­ter­tain­ment.

Hill has been hop­ing to ex­plain that Live Na­tion con­demns stage­hands in his home re­gion to poverty level wages while de­priv­ing them of health and re­tire­ment ben­e­fits. Con­di­tions in many venues are dan­ger­ous and un­healthy— some­times the­work­ers aren’t even given wa­ter to drink. Safety train­ing is all but nonex­is­tent.

This is the re­sult, he says, of Live Na­tion’s de­ci­sion to hire its staff through a sub­con­trac­tor named Crew One Pro­duc­tions, which pro­vides stage­hands and other tech­ni­cal per­son­nel for en­ter­tain­ment venues in At­lanta and across the South­east. Crew Onec an pro­vide low-cost la­bor be­cause it clas­si­fies those work­ers as in­de­pen­dent con­trac­tors, not em­ploy­ees. In­deed, while Crew One de­ploys hun­dreds of stage--

hands, it claims to have only 12 em­ploy­ees in its five of­fices.

The Crew One stage hands are not sub­ject to the con­tracts Live Na­tion has signed with the In­ter­na­tional Al­liance of The­atri­cal Stage Em­ploy­ees, or IATSE, for shows in which Live Na­tion is the di­rect em­ployer. Union scale for stage­hands in At­lanta runs from $18 to $26 an hour; em­ploy­ers also are re­quired to con­trib­ute to IATSE’s re­tire­ment and health in­sur­ance funds. (In Los An­ge­les, union rates are higher: At Sta­ples Cen­ter, for in­stance, staffers earn a min­i­mum of about $32 an hour.)

When Live Na­tion works through Crew One, how­ever, the tech­ni­cal work­ers are paid as lit­tle as $9 an hour— a hair above Ge­or­gia’s min­i­mumwage of $7.25— ac­cord­ing to tes­ti­mony de­liv­ered by Crew One Gen­eral Man­ager Jeff Jackson at a Na­tional La­bor Re­la­tions Board hear­ing in April 2014. It pays no health or re­tire­ment ben­e­fits. Crew One’s “in­de­pen­dent con­trac­tors” have to pro­vide their own hard hats, rig­ging ropes and steel-toed-work boots, which are re­quired on the job. Crew One pro­vides no safety train­ing, Jackson ac­knowl­edged, though the firm’s web­site de­clares, “We make safety a top pri­or­ity.”

Crew One told meit’s “com­mit­ted to pro­vid­ing the high­est qual­ity ser­vice to all of its clients and to treat­ing fairly all of the­work­ers.”

Glim­mers of an agree­ment be­tween Live Na­tion and IATSE over the At­lanta sit­u­a­tion emerged last week, pos­si­bly be­cause of the prospect of an or­ga­nized protest at Wed­nes­day’s an­nualmeet­ing, pos­si­bly be­cause the com­pany’s na­tional con­tract with IATSE is up for rene­go­ti­a­tion at the end of this year, and pos­si­bly be­causewe started ask­ing ques­tions of Live Na­tion in prepa­ra­tion for this column.

Sources say Live Na­tion has hinted that it might be will­ing to sign a con­tract with IATSE re­quir­ing that staffers at its At­lanta shows be as­signed through the union’s hir­ing hall, rather than through Crew One. A Live Na­tion spokesman would say only that the firm “has over 50 agree­ments in place with IATSE through­out the coun­try and en­joys a strong re­la­tion­ship with the union.” If there’s suf­fi­cient progress in the next few days, Hill may not need to cometo Cal­i­for­nia af­ter all.

Work­force ad­vo­cates say the mis­clas­si­fi­ca­tion of em­ploy­ees as in­de­pen­dent con­trac­tors is a large and grow­ing prob­lem, es­pe­cially in in­dus­tries where sub­con­tract­ing is com­mon, work is project-based and work­ers are as­signed in small groups or in­di­vid­u­ally. The prob­lem in­creased dur­ing the Great Re­ces­sion, when un­em­ploy­ment sapped work­ers’ bar­gain­ing power. But it’s been en­demic for years in the en­ter­tain­ment in­dus­try, and is the cause of con­tin­u­ing fric­tion be­tween truck­ers and truck­ing com­pa­nies at the ports of Los An­ge­les and Long Beach.

Em­ploy­ers can garner huge ben­e­fits by avoid­ing “em­ploy­ment-re­lated obli­ga­tions,” says an up­com­ing report by the Eco­nomic Pol­icy In­sti­tute, a non­par­ti­san, la­bor-af­fil­i­ated think tank. They “save on la­bor and ad­min­is­tra­tion costs and gain ad­van­tage over com­peti­tors.” They avoid pay­ing the em­ploy­ers’ half of So­cial Se­cu­rity and Medi­care taxes (work­ers must pay in­stead), and un­em­ploy­ment in­sur­ance and work­ers’ com­pen­sa­tion taxes. They even can cir­cum­vent im­mi­gra­tion en­force­ment— em­ploy­ers can’t be charged with hir­ing un­doc­u­mented work­ers if they don’t have any em­ploy­ees.

Mis­clas­si­fi­ca­tion is part of a larger trend to­ward sep­a­rat­ing work fromthe sta­bil­ity of tra­di­tional em­ploy­ment. Com­pa­nies such as McDon­ald’s hand off their re­spon­si­bil­ity for front-linework­ers’ pay and work­ing con­di­tions to fran­chisees, and “shar­ing econ­omy” com­pa­nies such as Uber and Airbnb func­tion as mid­dle­men. The trends’ boosters say they of­fer work­ers flex­i­bil­ity and free­dom, though in re­al­ity it maybe the free­dom to strug­gle in jobs in which one is on one’s own. Much of the job growth in the In­land Em­pire comes from ware­houses op­er­ated by sub­con­trac­tors for com­pa­nies such as Wal-Mart, Macy’s and Kohl’s, on terms that may al­low the big em­ploy­ers to dic­tate the work­load but side­step re­spon­si­bil­ity for work­ing con­di­tions.

State and fed­eral au­thor­i­ties are start­ing to crack downon fla­grant mis­clas­si­fi­ca­tion, in part be­cause they are be­ing de­prived of much-needed tax rev­enue. Amajor blow against mis­clas­si­fi­ca­tion came out of Cal­i­for­nia last year, in a case in­volv­ing 2,300FedEx driv­ers. FedEx des­ig­nated the driv­ers in­de­pen­dent con­trac­tors and re­quired them to pro­vide their own trucks (paint­edFedEx white and dec­o­rated with its logo) and pay for their own uni­forms, scan­ners and other equip­ment. Yet the com­pany ef­fec­tively dic­tated the driv­ers’ hours, per­sonal ap­pear­ance and cloth­ing “fromtheir hats downto their shoes and socks,” the U.S. 9th Cir­cuit Court of Ap­peals ob­served.

They’re em­ploy­ees in all but name, the court said in a rul­ing that ex­posed the com­pany to claims for back pay and over­time. “Our de­ci­sion sub­stan­tially un rav­els FedEx’s busi­ness model,” Judge Stephen S. Trott ob­served in a con­cur­ring opin­ion.

The cost to mis­clas­si­fied work­ers can be enor­mous. Pay and­work con­di­tions at Crew Oner eached the point that its work force voted by nearly a 2-1mar­gin last June to union­ize through IATSE — a gen­uine achieve­ment for­work­ers with lit­tle job se­cu­rity in a re­gion tra­di­tion­ally hos­tile to union or­ga­niz­ing. Since then, how­ever, Crew One has re­fused to bar­gain with the union, ar­gu­ing that it can’t legally be forced to ne­go­ti­ate with “in­de­pen­dent con­trac­tors.” The NLRB re­jected that ar­gu­ment in Jan­uary, but the com­pany last month filed an ap­peal in fed­eral court.

The At­lanta work­ers’ in­stinct to pres­sure the ul­ti­mate em­ployer, Live Na­tion, is a sound one. “Our ap­proach is to say to Live Na­tion, ‘You guys are in­te­gral to this prob­lem,’ ” Hill told me. “Ul­ti­mately, it’s Live Na­tion’s de­ci­sion where they get their la­bor force. If not for their de­ci­sion, we wouldn’t be get­ting paid way be­low­stan­dard com­pen­sa­tion with no fringe ben­e­fits.”

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