Why everyone wants to slam the brakes on this gig workers bill

Uber app.
Uber app.
Tero Vesalainen/Shutterstock

Why everyone wants to slam the brakes on this gig workers bill

Both labor and industry are fighting the 11th-hour legislation.
June 18, 2019

It’s rare that labor and industry interests align, but in the hazy, hectic days of the end of the state legislative session, anything can happen.

State Sen. Diane Savino and Assemblyman Marcos Crespo introduced a bill on Friday that would allow gig economy workers and other independent contractors to unionize and collectively bargain with their employers. While tech companies predictably objected, the legislation has also managed to draw criticism from several labor groups, including SEIU 32BJ and the New York Taxi Workers Alliance, which represents taxi, livery and app-based drivers.

Here’s what each side is saying about how the bill comes up short.

What would the legislation do?

The Dependent Worker Act from Savino and Crespo would create a new classification of worker – a “dependent worker” – to include gig economy workers and extend to this classification the right to organize and bargain collectively through representatives of their own choosing. The bill defines “dependent worker” as anyone who provides personal services to a consumer through a private third party. That third party includes digital app platforms like Uber and Postmates, as well as any others that establish how much a worker is to be paid for their services or how much a consumer is charged, or which collects payment from the consumer or pays the worker.

Additionally, the bill extends to this new category of workers protections including prohibition of wage theft and recordkeeping requirements, and the state Department of Labor would have the authority to enforce those rules. The bill also requires that the commissioner of labor hold public meetings with representatives of businesses, employees and dependent workers on the feasibility of extending additional benefits to dependent workers, and report findings and recommendations for further action to the governor and state legislative leaders.

Who backs the bill?

The primary labor group backing the bill is the New York State AFL-CIO, which has called attention to the lack of protections afforded to those employed by digital app platforms. “The bill would allow app workers that do not meet current legal definitions of employment the right to form a union,” Mario Cilento, president of the union, said in an emailed statement. “It also provides important wage payment protections and provides the Department of Labor with regulatory authority for enforcement purposes. Of course, we would prefer to provide these workers with the full suite of employment protections. However, this bill can be passed this session and we can get these workers some protections now.”

Representatives for Savino and Crespo, the legislation’s sponsors, did not respond to requests for comment on Tuesday. But Savino, chair of the state Senate’s Committee on Internet and Technology, has raised the issue of the gig economy as a priority in the past. “I've been speaking for the past several years about the need for labor laws to be dragged into the 21st century, particularly for a sector that's commonly referred to as the gig economy,” she told City & State back in January. “I'm going to focus on how to get a handle on this in terms of legislation and policy to protect workers and provide a clear set of rules for employers.”

Why are some labor groups upset?

In an opinion piece published in the Daily News on Tuesday, Hector Figueroa, president of 32BJ SEIU, and Bhairavi Desai, executive director of the New York Taxi Workers Alliance, called out the state AFL-CIO for supporting the bill, which they say “cherry picks” the labor laws that should apply to gig workers. “The bill basically says that the only employee-like benefit that the gig workers would be protected under is collective bargaining. But it's collective bargaining without protections on minimum wage, overtime, workers compensation, paid time off, even protection against unlawful deduction,” Desai told City & State. “The bill is actually not strong on protecting against wage theft.”

Desai argues that giving workers the right to collectively bargain doesn’t mean much if they’re not also guaranteed other protections like minimum wage. That, she said, puts the burden on workers to bargain from a weak starting point. “Collective bargaining happens in the context where workers already have other labor law protections,” she said. “To isolate collective bargaining from other labor law protections leaves the workers bargaining from zero.”

Desai and Figueroa advocate for something more akin to legislation that has passed the California state Assembly and is making its way through that state’s Senate. That bill would codify a ruling in California’s Supreme Court establishing an “ABC” test for determining whether a company can classify a worker as an independent contractor. In order to classify a worker as such under that test, the company has to prove that the individual is free from control of the employer, doing work outside the usual course of business of the employer and engaged in an independently established business.

Desai says the legislation on the table in Albany undermines much of the work she and other organizers have done on behalf of gig workers. “I think most importantly, it misses a massive opportunity,” she said of the push to pass this bill by the end of the session. “Through gut-wrenching organizing, we've built up momentum to really lift up the veil, to really expose the gig economy as nothing but a business model that leaves workers in poverty, in insecurity. And so we have momentum finally. And how could one of the most progressive states in the country use that momentum to lock workers out, rather than advancing rights?”

What doesn’t the tech industry like about it?

On the opposite end of the spectrum, those representing tech interests argue that this new worker classification would upend the industry in an 11th-hour move that doesn’t even give companies a seat at the table. “As with most things, this is a complicated problem, and there are no easy answers,” said Julie Samuels, executive director of the industry group Tech:NYC. “But if you don't have all sides at the table trying to work that out, you're going to end up with a solution that is unworkable for one side.”

That doesn’t mean that tech is completely opposed to changes in the gig economy, Samuels said. “Our very old model of independent contractor versus full-time employee is not fit for the way people actually work,” she said. “What we really need is a new framework that makes sense for workers, that makes sense for companies, that makes sense for our society. And a lot of these companies are absolutely on the record wanting to do more for the workers who find work on their platforms, but because of the way the law is currently structured, they've found their hands tied.”

Tech:NYC has advocated for alternatives in the past, Samuels said, including an effort in New York to introduce a portable benefits system for independent contractors that would provide a safety net without turning them into full-time employees.

Where do industry and labor’s objections align?

While representatives for tech companies and their workers take issue with different aspects of the legislation, they agree on one thing: This bill was hastily introduced. “This was clearly done at the last minute on purpose,” Samuels said, noting that since it was introduced at the end of session, there is no time for public hearings or conversations between multiple stakeholders. “It's a sloppy bill. The companies weren't even part of the conversation, so you've got something that was completely one-sided, and the idea that you would take that kind of process – or total lack of process – and push through such a big law at the last minute like that is quite frankly really troubling.”

Desai agreed on the latter point. “There was no process,” she said. “You would think that if the bill was so groundbreaking for workers, that workers would have been the ones to storm the Capitol in support of it. It's just a sham. You don't fight for workers’ rights in the darkness of the night, you do it in daylight with pride.”

Annie McDonough
Annie McDonough
is a tech and policy reporter at City & State.
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