Nov 28 Faced with a barrage of lawsuits from
workers demanding benefits and recognition as employees, some
companies in the fast-growing '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
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 'on-demand' 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
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
"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 four-year-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
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.
(Reporting by Dan Levine and Kristina Cooke in San Francisco;
Editing by Bill Rigby)