NYC to Cap Number of Uber, Lyft Drivers

Traffic uber lyft NYC law suspect TLC license

In the Jimi Hendrix song, Crosstown Traffic, Jimi plays a nifty little riff with a makeshift kazoo constructed from a comb and tissue paper. The lyrics compare trying to get through to his lady friend with trying to get through Manhattan’s cross-town traffic, which was already bad in 1967. (Thanks Wikipedia!)

News Alert: New York City Has Bad Traffic!

So whose fault is that?

In a gut punch to the gig economy, New York City just passed an ordinance that will place a one-year ban on granting new licenses for ride hailing vehicles.

To drive using Uber or Lyft in NYC, you need a license from the Taxi and Limousine Commission (a different kind of TLC). During this one-year suspension period, the city will conduct a study on traffic and congestion and will examine driver compensation.

According to this Wall Street Journal article and nifty graph, since the emergence of Uber and Lyft as ride-share options, the value of NYC taxi medallions has plummetted from about $1 million to roughly $200,000; and since 2015, the number of TLC-licensed drivers (cabs and ride-sharing services) has more than doubled. The City points to increased congestion as the reason to suspend the issuance of new TLC licenses for a year.

The ride-share companies argue that the cap will limit the number of available drivers in outer boroughs, increasing New Yorkers’ wait times.

Is the City’s motivation really to address traffic congestion? Or is the idea instead intended to help the struggling taxi industry? Hmmmm.

Under the new law, licenses that have already been granted are not being taken away.

In case you were interested (or even if you are not), here are the general requirements for obtaining a license from TLC if you want to drive. [Uber, Lyft]

But for the next 12 months, the application process will be “just like crosstown traffic,
So hard to get through to you.”

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Do ABC Tests Matter if my Business is not in California? (Yes!!!)

ABC Test Califoirnia Dynbamex Massachusetts other states

According to Michael Jackson and his brothers (don’t forget Tito), ABC is easy as 1-2-3, and it’s also easy as do-re-mi. According to Julie Andrews, in Do-Re-Mi, once you know the notes to sing, you can sing most anything. This is not technically true, as once demonstrated by William Hung.

ABC may sound easy, and some people might think they can sing anything.  But actual compliance with ABC Tests is not easy — and yes, every business needs to think about how it would comply with ABC Tests. (For background on What is an ABC Test?, read here and here.)

ABC Tests are not just in California. Massachusetts uses an ABC Test to determine who is an employee under state wage law. New Jersey uses an ABC Test to determine whether someone is an employee or independent contractor for state wage law. Unemployment too.

For unemployment purposes, lots of states use ABC tests to determine whether someone seeking unemployment coverage was your employee or an independent contractor. These states include Connecticut, Delaware, Illinois, Indiana, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, Vermont, Washington, and West Virginia. There are more but I started prioritizing my list by number of electoral votes.

Because ABC Tests are stricter than ordinary balancing tests (like Right to Control or Economic Realities tests), your company may be required to make unemployment contributions for individuals who are independent contractors under most laws but are employees under your state’s unemployment compensation law. You could owe back assessments and penalties for failing to pay into the state unemployment insurance fund.

New York, Pennsylvania, and D.C. use ABC Tests for work performed in the construction industry.

Some states use even tougher multi-factor tests to determine whether an individual presumed to be an independent contractor is really an employee. Maine has an ABCDE Test, meaning each of five factors must be met (plus another 3 from a list of 7, creating a veritable menu of family-style Chinese take-out for misclassification). New Hampshire uses an ABCDEFG Test to determine whether someone is an employee subject to its workers compensation and wage and hour laws.

Congressional Democrats, including Bernie Sanders and his hair, have introduced a bill that would use an ABC Test to determine whether someone is an employee under the NLRA. The bill has no chance to become law unless (until?) the Democrats control both houses of Congress and the Presidency, but for now, it’s worth noting that there is a desire among some lawmakers to adopt sweeping changes to the definition of employee.

The point is that ABC tests are prevalent already — and they are expanding. The California decision adopting an ABC Test was issued three years after the New Jersey Supreme Court adopted a similar (but less stringent) ABC Test for its state wage and hour laws.

With more state legislatures and state supreme courts considering changing the tests, we can expect this trend to continue. We can expect more states to adopt ABC Tests, especially in states where the courts (like in California) make up ABC Tests without legislative input. For a legislature to pass an ABC Test, it takes some work, bicameral support, and usually the signature of a governor. For courts to make up new ABC Tests, however, it’s easy as 1-2-3, do-re-mi.

Business should be thinking proactively about whether their contracts, relationships, and public-facing statements (such as in websites) will allow them to support independent contractor status when an ABC Test is used to determine WhoIs My Employee?

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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NYC Freelancer Law & New Rules Now In Effect, But New Rules Could Violate Federal Law

new york city freelancer law new rulesIf you retain freelancers in New York City, pay attention.

As we wrote here, NYC’s Freelance Isn’t Free Act requires a written agreement when retaining an individual independent contractor, if the value of services is $800 or more. The law covers any individual non-employee, including nannies and babysitters. (Loyal readers, please read this earlier post for details.)

The law took effect May 15, 2017, but new rules — effective July 24, 2017 — create additional burdens.

The NYC Department of Consumer Affairs has published final rules implementing the Act. While the purpose of the rules is (supposedly) to clarify the Act, the Rules go much further and create new requirements — some of which may be contrary to federal law.

Continue reading

What’s Up? Black Car Drivers Are Independent Contractors. Here’s Why.

balloons-1786430_1280At the end of Pixar’s Up, Carl and Russell sit on a curb pointing out cars: “Red one!” “Blue one!” Then Dug (the dog) calls out “Gray one!” which I find endlessly funny every time I watch it.

Whatever color the car, they sat there content, eating ice cream.

Black car companies in New York are celebrating too (hopefully with ice cream), after a recent decision preserving their drivers’ status as independent contractors. In Salem v. Corporate Transportation Group, the Second Circuit Court of Appeals ruled that drivers were not entitled to overtime pay, since they were not employees, but rather independent contractor franchisees.

We’ve written often in this blog about the different tests for determining Who Is My Employee? This case was brought under the Fair Labor Standards Act (FLSA) and comparable New York law, so the Court applied an Economic Realities Test. This test measures whether workers are economically dependent on one company to earn a living or are in business for themselves.

Relying on the Economic Realities factors, the Court ruled the drivers were economically independent and were in business for themselves. Here are the keys to victory:

  1. The drivers purchased franchises, choosing from a variety of options (rent, own);
  2. The drivers used their own cars and paid all their own expenses;
  3. The drivers could drive for competitors or for personal clients;
  4. The drivers were entrepreneurs, controlling many significant aspects of their personal driving business;
  5. The drivers were free to accept or reject jobs;
  6. The drivers chose when, where, and how often to work; and
  7. The franchisor company could not freely terminate the drivers’ franchise agreements.

While independent contractor relationships remain under fire, this decision shows that there’s still hope. Companies can win these cases when they carefully construct the facts, relinquish control, and allow contractors to run their own enterprises.

Although these drivers had considerable discretion over how to run their individual businesses, none (unfortunately) had the creativity to ditch the car and transport customers in a helium-balloon powered house.  Now back to the film.

film-158157_1280

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

New NYC Law Requires Written Agreements for Solo Contractors, Even Nannies and Babysitters!

baby-tears-small-child-sad-47090Do you have a nanny or a housekeeper? A regular babysitter? If so, pay attention.

Anyone hiring a solo independent contractor in New York City will need to comply with the Freelance Isn’t Free Act, which takes effect May 15, 2017. Anyone. Individuals included.

The Act requires a written agreement for all contracts where the value of services is $800 or more, either in a single contract or in the aggregate over the past 120 days.  Continue reading