Companies Oppose Efforts to Reclassify Gig Workers as Employees

Allen Smith, J.D. By Allen Smith, J.D. March 9, 2022
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A car with Lyft and Uber stickers on the back windshield

​Uber Technologies and Lyft Inc. have launched a media campaign opposing legislative efforts to classify their workers as employees nationwide. The federal proposal is based on a law in California that resulted in the reclassification of numerous independent contractors as employees. We've gathered articles on the news from SHRM Online and other media outlets.

California Law Applied Nationwide?

The proposed federal reform legislation would be the national equivalent of California's controversial AB 5, which makes it easier to classify workers as employees and harder to classify them as independent contractors. The federal labor reform legislation calls for several provisions that would strengthen unions and protect workers.

(Los Angeles Sentinel)

Media Blitz

App-based companies, including DoorDash Inc. and Grubhub Inc., plan to run TV and Internet ads in Washington, D.C., featuring workers who say they prefer the flexibility of the independent-contractor model over that of a company employee.

(The Wall Street Journal)

Advantages of Independent-Contractor Work

Workers who engage in independent-contractor work have a variety of reasons for doing so and reap different benefits from such work, according to a recent Society for Human Resource Management brief to the National Labor Relations Board.

"Workers prefer flexibility because it allows them to choose for whom they provide services and opportunities to pursue multiple passions simultaneously," the brief said.

Independent work also affords workers a greater ability to care for members of their family. In addition, when workers can choose how, when and where to work, they are able to set their own priorities, the brief noted.

(SHRM Online)

Successful Campaign in California

The app-based companies won a key vote in California in 2020 that exempted them from reclassifying their drivers as employees. Uber, Lyft, DoorDash Inc., Postmates Inc. and Instacart contributed $200 million to support Proposition 22, which lets them bypass a state law—AB 5—intended to provide employee-like protections for their drivers. The campaign was the most expensive for any ballot measure in state history.

(The Wall Street Journal)

Proposition Struck Down

However, the question of whether gig workers are employees entitled to benefits such as overtime, minimum wage and reimbursement of business expenses continues to be debated in California. A state judge struck down Proposition 22 last year as unconstitutional. A California appellate court is weighing an appeal.

(Bloomberg) and (Bloomberg)

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