Posted on 05/03/2018 12:52:04 PM PDT by Kaslin
A new ruling from the California state supreme court may open the door for legislators in that state to once again try to wipe out the gig economy, including companies like Uber, Lyft and Airbnb. Previous, direct attempts to regulate such companies out of existence have failed so far, but this case deals with a tangentially related employment area. The court is ordering a change to how the state classifies independent contractors along with temporary employees.
By allowing companies to classify certain workers as independent contractors, they don’t have to comply with minimum wage laws, pay overtime or conform to other compensation rules. The question now is whether or not truly independent operators like Uber drivers will fall under this new classification guideline, basically wiping out the company’s entire business model. (LA Times)
The rise of independent contracting has delivered benefits for some, such as greater flexibility for workers and lower costs for employers. But it also ensnared some people in low-wage jobs without benefits, working schedules that can change daily.
Now, following a state Supreme Court ruling Monday, businesses across California could be forced to reclassify swaths of their workforces as employees, with profound effects on workers and companies.
By toughening requirements for when a worker is actually an employee, the California Supreme Court won praise from labor advocates who say the move will put more dollars in the pockets of previously misclassified workers. Independent contractors are not subject to minimum wage, overtime or workers’ compensation requirements. The ruling may force companies in certain industries, especially in the app-driven gig economy, to change their business model.
“Almost every industry has dipped their toe in the independent contractor, freelancer model,” said Rich Meneghello, a partner with Fisher Phillips, a national law firm that represents employers. “As of today, they are all going to have to apply this new test.”
There are numerous methods used by employers to cut costs and redefine roles toward that end. Temp companies have really surged in recent years as more and more companies do all of their “hiring” through such agencies. The temp workers frequently receive lower pay and no benefits (or substantially reduced packages). That may be fine if it’s a truly temporary job with a defined start and stop date, but some companies keep their “temp” workers on the job for years, never offering them a permanent position. It’s understandable how these workers might benefit from a change like this.
But California lawmakers are immediately focusing on the gig economy. If they attempt to classify Uber drivers or Airbnb hosts as “employees” it will destroy the business model of those companies and end the opportunity for those workers to earn extra money. But if there’s any honesty among those considering the question it really shouldn’t even be a consideration. These gig economy participants aren’t “employees” in any traditional sense of the word. They don’t report to a human being as their boss. Their only “evaluations” come from their riders and guests. They are assigned no set number of hours to work or a number of days they must make their rooms available. They work for themselves and only use the app provided by the “parent company” as a tool to facilitate their efforts.
If California attempts to force ridesharing companies to pay drivers by the hour and give them benefits, they will have put an end to the company as it exists today, at least in California. The same goes for similarly restricting Airbnb. That will make the taxi companies, the big hotel chains, their unions and their lobbyists very happy to be sure. And the money those entities donate to politicians will have been well spent. But both the drivers and hosts who work in the gig economy and the consumers who make use of their services will probably be ready to revolt.
Not to be supporting Uber, et al, but why do Californians do everything they possibly can to kill companies and jobs?...................
In a normal place, the public would get fed up an vote them out of office. In a California, they just want to emulate Venezula when the chickens come home to roost.
The end goal for these people is complete government ownership of all the means of production. Government would be the sole employer. They can’t get there just yet, but they take every step they can to move toward their goal.
The minimum hourly rate is one step. bernie’s guaranteed job for all is a giant step. This is a baby step.
I wonder if this will impact the tens of thousands of contract teachers (adjuncts) at all levels of the California community college and state university systems.
Probably not.
I think they’re overreaching when they include AirBnB.
California...meet Detroit.
The turnover among Uber drivers is so high that I don’t think many would qualify as employees.
Uber, AirB&B, fracking, the internet, GMOs, etc. Ever notice how “progressives” reflexively oppose all innovation?
But they love trains and windmills. How progressive.
Why is that....?....anyone know...?
I've been driving for UBER for 2 years...a few issues with UBER maps that's about all.
I drive for Uber and Lyft on weekends. So this is one more reason to stay away from the states on the Left Coast.
Seeing as employee business expenses are no longer deductible under the TCJA, drivers will most definitely NOT want to be W-2 employees. Watch for these Kali-based companies to move their headquarters elsewhere.
Is the “gig economy” how nascent rock and roll bands get paid?
The temporary worker ‘knows’ their pay before they accept a work assignment which they ‘choose’ to accept or not.... They also know it does not include benefits. Like any job you go to you agree with what you're offered or not at the time of hire...........further they can leave the job at any time if it doesn't suit them.
For the big corporations this also applies... however the temporary worker generally is under the ‘false assumption’ that if he hangs in there long enough they will offer a permanent position, which is not the purpose of ‘temporary’ work........the time line will be according to the fluctuations of production etc. of the company.....and you may not work every day but only as needed.
“Not to be supporting Uber, et al, but why do Californians do everything they possibly can to kill companies and jobs?...................”
They are not, necessarily, trying to kill companies. What they are trying to do is increase their tax base and tax flow. A company has strict cash flow requirements for taxes. They press a button to send your pay check, but the taxes you would have earned are sent first; every week or two. That cash flow alone would be a huge increase. They think. Also, if you examine the rules for employees, they are extremely expensive to have. Much of that expense, unemployment “insurance,” for example, is really an additional tax. It’s all about money.
The ultimate effect, though, will be short-lived as most of the companies can’t afford to do business that way, or, only exist as a business because they don’t have traditional employees. So, in reality all that potential tax revenue isn’t really there to tap.
The nice thing about gig economy jobs is the ability to get in and out quick. Many people do them while they are looking for something more permanent, but they still want money coming in.
There are numerous videos on YouTube talking about all of the downsides of Uber, mostly by current or past Uber drivers. In one they mentioned the huge turnover.
California politicians are bought and paid for by the labor unions. The labor unions are luddites.
bookmark
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.