Terry H. Schwadron
It seems New York State wants to follow California down a legislative path to protect Uber and Lift drivers and other “gig economy” workers by ensuring that they get benefits and employee rights.
The only problem is that the California law has led to all kinds of unintended consequences for writers, musicians, dancers, artists, and probably home health workers–all people who are working as independent contractors, either by choice or by the marketplace, and now all people who are losing work.
Democratic New York Gov. Andrew Cuomo, like California’s Gavin Newsom, is recognizing that huge numbers of people are moving into gig economy work without employee protections from “economic exploitation,” Cuomo said in his annual State of the State speech earlier this month.
The California law has led to all kinds of unintended consequences for writers, musicians, dancers, artists who are working as independent contractors and now are losing work.
There were no specifics, but his model is California, which is requiring companies to consider their independent contractors, like Uber drivers, as full-time employees. Independent contractors have been defined by a series of conditions, like working on their own schedule, or with their own equipment, or without oversight and direction. Companies like Uber, however, have been moving to control more aspects of worker conditions without recognizing the benefits.
And, all this is happening as coronavirus has the potential to explode work as the gig economy has known it. Most gig economy jobs are dependent on service roles or meeting an entertainment audience or involve other public settings that may be seriously disrupted by the spread of contagious illness.
Just look at the sudden shutdown of the big SXSW concert exhibition in Austin this week as an example and multiply it by the number of cities and states that may find themselves under pressure to do something to stop disease spread.
A Jobs Minefield
As Crain’s New York noted, Cuomo could be stepping into a legal and jobs minefield.
Crain’s detailed the case of the San Jose Jazz Festival, for example, a festival which last year presented 1,000 musicians from California and around the world in 326 separate performances. Normal practice for most musicians was to have the bandleader get paid by the festival, with musicians paid as independent contractors. Under the new California law, the festival will be forced to tell musicians they must either become employees of San Jose Jazz or incorporate before they will be allowed to perform. In either case, someone will be responsible for a substantial workload of managing contracts and payroll.
Though the law was aimed at Uber and Lift, some groups like doctors, lawyers, accountants, brokers, and builders were exempted under the new law. But not musicians and writers, for example.
Companies Fighting Back
Meanwhile, the targeted companies are fighting the law tooth and nail. Using California’s ballot initiative procedure, they are spending more than $ 100 million to convince voters to repeal the law. They are also trying to tweak their business plans to allow them to claim they don’t meet the three tests of the law: that workers perform tasks under the company’s control, that their work is integral to the business and the workers are not running independent enterprises.
In New York, of course, no one really knows how many people earn a living from the gig economy.
It is not just culture workers, but baby sitters, consultants, home health aides, personal shoppers and oodles of other jobs that exist outside of the traditional employee workplace.
Critics also include those with more partisan outlooks.
The conservative-leaning Daily Signal notes that while Cuomo is aiming to prevent a repeat of 19th Century sweatshops, the gig economy and contract-based work is usually voluntary and desirable to those who make a living that way. If one considers true independent work in which individuals choose what jobs they want to perform, what hours they want to work, and how much latitude to accomplish their jobs, it hardly sounds exploitative.
In California, the adoption of the law has come with the elimination of work for contract writers, for example, who will never be hired by publications as full- or even part-time workers with associated benefits and assignments.
According to the Bureau of Labor Statistics, “Fewer than 1 in 10 independent contractors would prefer a traditional work arrangement.” And the average Uber driver wouldn’t work at all if they had to commit to a traditional taxicab employment arrangement.
There are many reasons and situations that lead people to prefer independent status. Single parents may want more flexibility and autonomy, students or those needing more money who need income to live on while studying or working another job, older and semi-retired individuals who want to keep a foot in the workforce. Disabled individuals or those with mental illnesses who can work some days, but not others, stay-at-home parents may want to work without set hours. Innovators may need income to support their entrepreneurial pursuits.
If arguments over proposed solutions sound complicated, it is usually because they are. One person’s “protection” is another’s job loss in this matter.
There have to be thoughtful ways to keep from creating new problems in solving a current one.