When someone delivers your groceries or your dinner, do you call that person an essential worker or an essential contractor? This might sound like an odd question, but it matters because workers — or employees — are entitled to protections like paid sick leave and a minimum wage, but “contractors” are not.
California’s Assembly Bill 5 went into a effect in January. The law stops companies from misclassifying their employees as independent contractors. As California grapples with the COVID-19 pandemic, the new law has illustrated how critical workplace protections are — particularly for those who are misclassified and treated like independent businesses when they are, in fact, employees.
Employee status grants basic rights and benefits to workers that we have agreed to as a society, including overtime pay, unemployment insurance, health and safety protections, disability insurance, paid family leave and more. When employers misclassify their workers as independent contractors, they gain an unfair advantage against competitors and shift costs onto workers and taxpayers. It’s a key reason why city and state enforcement officials have brought misclassification lawsuits against companies like Uber, Lyft, Instacart and DoorDash.
Simply put, misclassification hurts our communities as a whole.
When workers don’t have access to paid sick leave, they are much more likely to come to work when sick, which risks spreading disease to co-workers and consumers. Researchers found that overall flu infection rates decreased by up to 20% in cities following the passage of paid sick leave policies.
All working people — particularly those who work with the public — need access to protective gear such as masks and gloves. Yet, when an Instacart shopper picks out groceries and delivers them to your door, they are not compensated for any protective equipment they use.
In addition, unemployment insurance assists workers who lose their job or work hours, as many have because of COVID-19. The unemployment benefits they receive are dollars that go directly back into our communities when workers buy necessities and pay their bills.
Employees are presumptively eligible for these benefits, whereas independent contractors are not.
In the current crisis, the federal government finally stepped up after four months to approve unemployment coverage for self-employed workers.
But the program was slow to roll out and three out of four gig workers do not qualify for assistance under the program.
When companies like Uber and Lyft refuse to abide by AB5, the cost falls directly on workers and taxpayers. In a recent study, we found that Uber and Lyft should have paid $413 million into the state’s Unemployment Insurance Fund from 2014 to 2019.
AB5 fixes this problem. Yet, app-based companies have pushed back with a ballot initiative that has qualified for the November general election. If passed, their initiative would go even further and prohibit state or local governments from passing any laws that require paid sick leave or other basic labor standards for their workforce — even canceling local emergency COVID-19 paid sick leave laws that would include these workers. This is what Uber, Lyft, DoorDash, Instacart and Postmates have amassed $110 million for, rather than cover their workers’ basic needs during this crisis.
All working people deserve the right to be safe and support themselves through a crisis. And we all need essential workers to be safe.
This is not the time to weaken protections for workers.
Ken Jacobs is the chair of the UC Berkeley Labor Center with a research focus on low-wage work, health care and labor standards policies. Recent research includes reports on worker misclassification and transportation network companies.
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August 05, 2020 at 06:00PM
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