Posted on 08/14/2020 4:14:34 AM PDT by Kaslin
Ride-sharing companies Uber and Lyft could be on the brink of shutting down in California after a judge ordered them to reclassify independent contractors as employees.
Why? All companies employing freelancers or individuals partaking in freelancing must comply with Assembly Bill 5 (AB5), the new anti-gig work law.
It seems benign on the surface. Once readers peruse the bill’s language, they discover its nefarious goals.
It erroneously claims the “misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class and the rise in income inequality.” And its federal companion bill, the PRO Act—supported by Democrats like Joe Biden—is equally damning.
Gig workers, who primarily identify as independent contractors, aren’t worse off due to their current status. Seeking to reclassify them as employees will carry serious legal ramifications and jeopardize many livelihoods.
Dem-Backed Unions Attack Gig Work Due to Shrinking Influence
Democrats and their public sector union allies malign freelancing. To them, imposing union rules on gig workers is an effective way to quash competition.
Why is there a concerted push to undermine companies like Uber, Lyft, and DoorDash? It’s quite clear: Public sector unions are losing relevance and can’t compete anymore. Membership is at an all-time low. Brookings Institution attributes the decline to growth of service-based jobs, deregulation, and adoption of right-to-work legislation by states, among many reasons.
According to a January 2020 Bureau of Labor and Statistics (BLS) report, only 10.3 percent of the U.S. workforce currently holds union membership. In 1983, about 20 percent of the workforce—or 17.7 million Americans— belonged to unions.
In contrast, freelancers—independent contractors, diversified workers, moonlighters, freelance business owners, and temporary workers— comprise 35 percent of the workforce, with 57 million full-time and part-time participants. And more American workers are considering freelancing on account of the pandemic.
What Exploitation and Oppression? Freelance Workers Voluntarily Choose Their Lifestyle
Are freelancers exploited and oppressed? Fake news.
The 2019 “Freelancing in America” report from Upwork, a global freelancing platform, reveals these workers are thriving and enjoying their independence.
45 percent of freelancers provide skilled services in fields like programming, marketing, IT, and business consulting. 60 percent of freelancers polled entered it voluntarily while 40 percent entered it out of necessity.
What explains their decision to choose gig work? Three top reasons include flexibility, being one’s own boss, and having the freedom to work in different locations.
Between 2014 to 2019, full-time freelancers grew from 17 percent to 28 percent of the freelance workforce, respectively. In 2019, freelancers contributed $1 trillion to the U.S. economy, constituting nearly five percent of the U.S. GDP.
Talk about a massive economic footprint!
According to their findings, a typical U.S. worker is paid $18.80 per hour while the median freelancer is paid $20 per hour. For skilled services, the median hourly rate for freelancers is $28 per hour.
Moreover, 67 percent of freelancers prefer to take home more pay to apply towards their own benefits.
Joe Biden Openly Campaigning on Employee Reclassification
Don’t be surprised to see Joe Biden endorse anti-gig worker, pro-collective bargaining policies. It’s on-brand for him.
In February, Biden tweeted praise for the House of Representatives passing the PRO Act. In May, he reiterated support for the PRO Act’s companion bill, AB5.
Biden’s campaign website clearly spells out his support for this disastrous policy:
Aggressively pursue employers who violate labor laws, participate in wage theft, or cheat on their taxes by intentionally misclassifying employees as independent contractors.
As president, Biden will put a stop to employers intentionally misclassifying their employees as independent contractors. He will enact legislation that makes worker misclassification a substantive violation of law under all federal labor, employment, and tax laws with additional penalties beyond those imposed for other violations. And, he will build on efforts by the Obama-Biden Administration to drive an aggressive, all-hands-on-deck enforcement effort that will dramatically reduce worker misclassification. He will direct the U.S. Department of Labor to engage in meaningful, collaborative enforcement partnerships, including with the National Labor Relations Board (NLRB), the Equal Employment Opportunity Commission, the Internal Revenue Service, the Justice Department, and state tax, unemployment insurance, and labor agencies. And, while Trump has weakened enforcement by sabotaging the enforcement agencies and slashing their investigator corps, Biden will fund a dramatic increase in the number of investigators in labor and employment enforcement agencies to facilitate a large anti-misclassification effort.
Conclusion
As a freelance media strategist and writer, I’m very concerned about Democrats pushing an anti-business policy that would destroy 57 million livelihoods—mine included.
Four years ago, I became self-employed on my own volition. I enjoy the freedom to work for and associate with many clients. I make far more money now than I did working for someone else. And I’m much happier, healthier, and productive since I ditched the 9-to-5.
Let me be clear: The government didn’t build my business. And I don’t need a public sector union to represent my business interests.
Freelancers are their own best advocates; let us speak for ourselves. Don’t punish us for voluntarily choosing this lifestyle.
I’m willing to bet that stupid laws like this one can easily be circumvented simply by having the worker set up shop as an independent entity rather than dealing with the employer directly. An Uber driver named John Q. Smith may be classified as an employee, but even under California law I’m sure there’s no mechanism for having “John Q. Smith LLC” classified as anything other than a contractor.
And that is the intention!
Solution :
Stay away from CA cities and drive your own car
Better yet, stay away from CA
If the independent contractors become corporations, they can make contracts as they please with no “employee” baggage. The corporations are then responsible for paying their employees
Now they want to destroy the gig economy as well to maintain the power they obtained from the economic powerhouse system they inherited and then ran into the ground and destroyed.
The American people are paying the price for these power hungry leeches desperate efforts to retain their power and relevance while destroying the system that gave them their power.
Depressing. I am just about to become a Dasher. Retired, need just a few bucks to make up where I am short. I hope the gigs will survive. For me, it’s a great solution.
One of the worst offenders are sports teams. My child chose to work in sports. My child makes okay money now but struggled severely to “pay dues.” Post college my child worked as an unpaid intern at one team and a “contractor” while interning for another team. When paid it was minimum wage and/or a commission at half the full time employee rate. We even had to fight to get commission money from the team that brought him in as an unpaid sales intern. After completing the last “internship”, while waiting to finally be picked up as a full time employee at another team, guess what, no unemployment benefits because of the contractors status the teams did not have to pay State benefits. No insurance, no unemployment and no PTO. Good life lessons were learned by working two jobs and learning that hard work pays off. Some major sports corporations are ripping off employees. My child was pushed into sales because he was told he had to start there before moving into the actual business side. This is someone with a Business BA from a reputable business school. It eventually worked out but only after a few years of mom and dad paying for medical insurance and occasionally for food. Hate Jeff Bozo, but used Amazon to make sure my child had food. My child’s current team does not abuse the system and only interns college students. From what I have been told and seen first hand West Coast sports corporations are the worst offenders. I was told this is common practice with many major corporations taking advantage of state laws regarding contractors.
Typically Dims attacked a problem with a machete where a scalpel was needed. They could have stopped major corporations from abusing the intern and contractor systems without hurting legit contractors.
There is a major difference between most freelance workers and most “gig” workers. The gig workers are lower skill and often exploited (e.g., end up making below the minimum wage once they pay gas for the vehicles they need to supply themselves); the freelancers mostly aren’t.
If that were the case, Uber would just be guiding their drivers into how to get an LLC most cheaply.
You can’t not meet the (often changing) rules for contractor vs. employee work and then get around it simply with an LLC.
Instead of setting up a corporation, it may be sufficient to just set up an LLC as a sole proprietor. This will give you the ability to obtain a separate employer identification number (EIN) from the IRS, which is all you need to have your “employer” classify you as a contractor and submit a 1099 Form at the end of the year.
I’m surprised Uber hasn’t been doing this already. It’s really no different than a trucking company that uses a mix of company drivers and independent contractors. There’s clearly SOMETHING that distinguishes between the two.
Uber is minutely managing when, where and how they do their work and how they represent the Uber brand to the public.
Yes, an LLC is a corporate identity and has much different rules than sole proprietor requiring the 1099 process
Paying extra taxes makes gig work pretty unappealing. Doesn’t seem fair.
An LLC is not recognized under Federal tax law. You can have an LLC set up in your state, but when you establish the company through the IRS it must be designated as one of three types of business entity under the Internal Revenue Code: a sole proprietorship, a partnership, or a corporation.
I am a gig worker.
I teach special technology classes and write books, web content and course manuals. I don’t “work” for anyone except the specifics of my contract. One week or one month, I get to choose when. I do it all from the comforts of home and I like it.
Why, democrats?
Leave me to F alone!
If you live in California, that is the problem. It is California specifically rather than democrats in general that are making the problem.
The citizens of California have yielded control of their destinies to the radical left wing tyrants and their lawyers
Another law restricting your freedom to work on your own terms. Much like minimum wage laws do.
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