A California court Monday ruled that Uber and Lyft must reclassify drivers as employees rather than independent contractors. Employee status comes with many important benefits, like paid sick leave, unemployment insurance and subsidized health insurance.
But Uber CEO Dara Khosrowshahi argued in a New York Times op-ed that it comes at the expense of flexibility, the lifeblood of the gig economy. He called for a new “third way” to classify and provide benefits to workers who fall somewhere between employee and independent contractor.
Under existing labor law, workers in America have to be classified as either an employee or an independent contractor. Paul Oyer, an economist at Stanford University, said that binary system goes back to the early 20th century when work looked pretty different.
“So the law isn’t perfect,” he said. “There’s a spectrum of possible work relationships. And we want to both protect workers along that spectrum, but also allow some amount of flexibility.”
While the pandemic has highlighted the need for better protections for gig workers, most still prefer to be independent, according to one survey, so they can set their own hours.
Gig platforms have argued that won’t be possible if workers are employees.
“That is just untrue,” said Benjamin Sachs, a professor of labor law at Harvard University. “You can be an employee and have an entirely flexible work arrangement.”
Many workers already do, especially now. But Seth Oranburg, a law professor at Duquesne University, said allowing employees to set their own hours often doesn’t make business sense.
“An employee that brings in $500 a month and cost $1,500 a month just for health care doesn’t add up economically,” he said.
Worker classifications and their attendant benefits could become increasingly important as the pandemic accelerates changes to employment beyond the gig economy, said New York University business professor Arun Sundararajan.
“The crisis that we’re going through now has wiped the slate clean,” he said. “Many companies have let go tons of full-time employees and so they have a chance to reconstruct their workforce and work arrangements.”
With so many workers out of the office and working independently, he said white collar work could start to look more like the gig economy.
What’s going on with extra COVID-19 unemployment benefits?
The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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