Never Surrender: Appeals Court Grants Reprieve for Ride Share App Companies; Focus Turns to Prop 22.

Album cover: Boy in the Box.
Label: Aquarius in Canada, EMI America in the U.S.
Sleeves: Definitely rolled up if you could see them.

Thank you to Canadian singer Corey Hart for providing the theme to this week’s post. The Number 3 song this week in 1985 opens with, “Just a little more time is all we’re asking for.” The song, of course, is Never Surrender.

Last week we wrote about the preliminary injunction granted by a California Superior Court, preventing ride share app companies statewide from continuing to classify drivers as independent contractors. We called that ruling “Act I” because the matter was headed to appeal.

As expected, the matter was immediately appealed. Now it’s time to queue up Canada’s Juno Award winner for 1985 “Single of the Year“:

Just a little more time is all we’re asking for.

‘Cause just a little more time could open closing doors.

In a more musical world, those would have been the opening lines to the Motion for Stay in the Court of Appeals. Regardless, the motion was granted, and the ride share app companies are not going to reclassify anyone quite yet.

If the stay was not granted, the ride share app companies had threatened to shut down in California.

Oral arguments are scheduled for mid-October, which means a decision is months away. As we expected in last week’s post, the real action is on Proposition 22, on the ballot this November.

If Proposition 22 passes, the new ABC Test in Assembly Bill 5 (which went into effect Jan. 1, 2020) would not apply to workers in the app-based rideshare and delivery business. Instead, those workers could stay classified as independent contractors, but the app-based companies must ensure that the drivers receive a predetermined level of compensation and benefits, including:

  • Earnings Minimum. The measure would require app-based companies to pay at least 120 percent of the minimum wage for each hour a driver spends driving—but not time spent waiting for requests.
  • Health Insurance Stipend. The measure would require rideshare and delivery companies to provide a health insurance stipend of about $400 per month to drivers who regularly work more than 25 hours per week (not including waiting time). Drivers who average 15 driving hours per week but less than 25 driving hours would receive half as much.
  • Medical Expenses and Disability Insurance. The measure would require that companies buy insurance to cover driver medical expenses and provide disability pay when a driver is injured while driving.
  • Rest Policy. The measure would prohibit drivers from working more than 12 hours in a 24 hour period for a single rideshare or delivery company.
  • Other. The measure would require that rideshare and delivery companies have sexual harassment prevention policies and conduct criminal background checks and safety training for all drivers. It also would prohibit discrimination in hiring and firing.

The measure would also prevent cities and counties from passing further restrictions on driver classification.

Here’s the webpage for Yes on 22. Keep a close eye on the results of the vote because it will probably determine the future of ride share in California.

And don’t forget to wear your sunglasses at night.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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New Rules for Drivers? California’s ABC Test Could Change Again in 2021

Worst parking.jpg

Rebellious? Indifferent? Clueless? I’m still trying to understand how this car thought it was ok to take up FOUR parking spaces in the parking lot at a Walgreens near my house.

Any one of the spaces seems suitable for a car of ordinary proportions. I have parked in most of these four spots before, and my experiences were uniformly positive. I’d give four stars to each spot. Reliable, met expectations. Near enough to the store entrance. Picking just one of the four would be an excellent way to start your shopping experience.

When people don’t like the rules they’re expected to follow, one approach is to try to change the rules. That’s what ride share and delivery app companies are doing in California.

Late last month, these companies achieved an important milestone, reaching the 625,000 signature threshold for a November ballot initiative that, if passed, would change the test in California for determining Employee vs. Independent Contractor. The measure will now appear on California ballots, giving voters the chance to override A.B. 5 for ride share and delivery app companies.

If the initiative passes, the new ABC Test would not apply to workers in the app-based rideshare and delivery business. Instead, those workers could stay classified as independent contractors, but the app-based companies must ensure that the drivers receive a predetermined level of compensation and benefits, including:

  • Earnings Minimum. The measure would require app-based companies to pay at least 120 percent of the minimum wage for each hour a driver spends driving—but not time spent waiting for requests.
  • Health Insurance Stipend. The measure would require rideshare and delivery companies to provide a health insurance stipend of about $400 per month to drivers who regularly work more than 25 hours per week (not including waiting time). Drivers who average 15 driving hours per week but less than 25 driving hours would receive half as much.
  • Medical Expenses and Disability Insurance. The measure would require that companies buy insurance to cover driver medical expenses and provide disability pay when a driver is injured while driving.
  • Rest Policy. The measure would prohibit drivers from working more than 12 hours in a 24 hour period for a single rideshare or delivery company.
  • Other. The measure would require that rideshare and delivery companies have sexual harassment prevention policies and conduct criminal background checks and safety training for all drivers. It also would prohibit discrimination in hiring and firing.

The measure would also prevent cities and counties from passing further restrictions on driver classification.

I wrote more about this bill here, leading the post with a harrowing flight selection option offered on my United app.

So if you‘re reading this post from the Left Coast, get out and vote in November. You can make a meaningful change in the way that California approaches the question of Who Is My Employee? In the meantime, drive safe, wear your mask, and park within the lines.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Voters Would Reject This Flight Option, But They Could Change Independent Contractor Law in California This November

Expensive flight

A few years back, I found myself headed to the Houston airport earlier than expected after a business trip. I decided to check my phone to see whether I could get on an earlier flight back home to Cleveland.

Turns out I could — for $52,270. For coach. There was also a first class seat available. For $69,570.

I declined and decided to wait the three hours for my originally scheduled departure. But for good measure, I took this screenshot because, hey, why not.

Taking the earlier flight would not have been a good use of my money. The real subject of this post is about five app-based companies who are making much better use of their money.

With app-based companies under constant attack through independent contractor misclassification claims, and with California’s new Assembly Bill 5 making it even harder to classify people as independent contractors, the major providers are fighting back.

They’ve pledged $110 million to support a ballot initiative in California that would redraw the lines in the Employee vs. Independent Contractor debate — at least for rideshare and delivery drivers.

Under current federal and state laws, a worker is either an independent contractor or an employee. It’s binary. Employees get lots of protections. Contractors get almost none. There’s no third category that would allow rideshare and delivery drivers to operate independently while receiving a minimum level of legal protection.

This proposed initiative would change that. The law would create new rules for app-based transportation providers and drivers in California.

If the initiative passes, the new ABC Test would not apply to workers in the app-based rideshare and delivery business. Instead, those workers could stay classified as independent contractors, but the app-based companies must ensure that the drivers receive a predetermined level of compensation and benefits, including:

  • Earnings Minimum. The measure would require app-based companies to pay at least 120 percent of the minimum wage for each hour a driver spends driving—but not time spent waiting for requests.
  • Health Insurance Stipend. The measure would require rideshare and delivery companies to provide a health insurance stipend of about $400 per month to drivers who regularly work more than 25 hours per week (not including waiting time). Drivers who average 15 driving hours per week but less than 25 driving hours would receive half as much.
  • Medical Expenses and Disability Insurance. The measure would require that companies buy insurance to cover driver medical expenses and provide disability pay when a driver is injured while driving.
  • Rest Policy. The measure would prohibit drivers from working more than 12 hours in a 24 hour period for a single rideshare or delivery company.
  • Other. The measure would require that rideshare and delivery companies have sexual harassment prevention policies and conduct criminal background checks and safety training for all drivers. It also would prohibit discrimination in hiring and firing.

The measure would also prevent cities and counties from passing further restrictions on driver classification.

The initiative needs 625,000 signatures to appear on the November 2020 ballot in California. I expect they’ll get the signatures, and then the media campaign will kick into high gear. Expect TV and radio ads, billboards, and a heavy social media push to garner support.

If the ballot measure passes, that will have been money well spent — a much wiser use of resources than for some dodo to pay $52,270 to take an earlier flight home from Houston. The proposed law would create a fairer and more predictable set of rules for drivers and companies, and it should substantially reduce the rampant misclassification lawsuits in the rideshare and delivery driver area.

I’ll be watching for similar proposed legislation in other states. And I’ll be watching airfares too, before I switch any future flights.

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© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Proposed Law Would Radically Change App Driver Protections and Legal Status; Might Also Stop Zombie Ant Apocalypse (Maybe).

california driver app law ant zombiesYou’re supposed to learn something new every day, right? Here’s something that’s definitely new, unless you are a fungus aficionado — and, lucky reader, because this is a read-only post, you do not have to identify yourself if you are indeed a fungus aficionado, and if you are, TMI, and keep it to yourself.

Anyway, there’s a fungus that attacks certain kinds of ants, takes over their ant-body cells, turns them into zombies, causes them to take a final mad bite into a certain type of leaf, then causes a plant spore to sprout from their heads. Yes, really. It’s right here in this New York Times article, complete with pictures.

The Ophiocordyceps fungus is not a dinosaur, despite its suspiciously dinosaur-sounding name, but it sounds pretty ferocious and looks like it’s threatening to kill off segments of the ant population.

Another thing that is ferocious and threatening to kill something off is California’s recent Assembly Bill 5, which would convert many independent contractors into employees under state labor laws.

The latest attempt to eradicate that ferocious law comes in the form of a ballot initiative being sponsored by some of the large ride hailing and delivery app companies.

The Protect App-Based Drivers and Services Act, if passed, would preserve the independent contractor status of app-based drivers in California if the app companies provide the drivers with a number of financial considerations and benefits, along with allowing the drivers to maintain control over when and where they work. The law imposes substantial driver protections that app companies are currently hesitant to provide, out of fear that providing these benefits and protections might cause the drivers to be deemed employees.

The law would strike a much-need balance that enhances driver rights while creating certainty on drivers’ classification status.

The app companies would have to provide an earnings guarantee of at least 120% of the local minimum wage for time engaged, a 30-cents per mile stipend to cover vehicle expenses, a healthcare subsidy contribution, occupational accident insurance, and liability insurance.

App companies would be prohibited from engaging in discrimination. Companies would also be required to implement a sexual harassment policy, conduct background checks, implement safety training, and implement a zero tolerance policy prohibiting driving while impaired. Rest periods would also be required.

In exchange, the app companies would receive assurance that the drivers are properly classified as independent contractors so long as four conditions are met:

(a) The network company does not unilaterally prescribe specific dates, times of day, or a minimum number of hours during which the app-based driver must be logged into the network company’s online-enabled application or platform.

(b) The network company does not require the app-based driver to accept any specific rideshare service or delivery service request as a condition of maintaining access to the network company’s online-enabled application or platform.

(c) The network company does not restrict the app-based driver from performing rideshare services or delivery services through other network companies except during engaged time.

(d) The network company does not restrict the app-based driver from working in any other lawful occupation or business.

The proposed law is supported by multiple prominent ride share and delivery app companies. Their hope is to gather enough signatures to place the issue on the November 2020 ballot in California.

This is worth watching. You can read more about it here. If passed, this can serve as model legislation to be applied elsewhere around the country.

In the meantime, if you see fungal spores starting to grow out of app drivers’ heads, you’ll know that Assembly Bill 5 got to them first.  We can only hope.

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© 2019 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Going Mobile? DOL Endorses Independent Contractor Model for Virtual Marketplace Apps

Opinion letter mobile app

Long before mobile apps were a thing, Pete Townsend and The Who were already going mobile. In the 1971 song, Townsend sings about the virtues of life on the open road, living in a mobile home. I’m an air-conditioned gypsy.

In an important opinion letter released this week, the DOL went mobile too, lending support to businesses in the “on-demand” or “sharing” economy. The letter is the first significant ruling that supports independent contractor status for service providers who obtain work through virtual marketplace apps.

A virtual marketplace app is a matchmaking service. It connects consumers who need a service (driving, housekeeping, handyman, anything) with service providers who do the work. Virtual marketplace companies (VMCs) are frequently the target of misclassification claims. In these types of claims, service providers — and the plaintiffs’ lawyers who love them — file lawsuits claiming that the service providers are really employees of the VMC. Frequent targets have been Uber, Lyft, Doordash, and Grubhub.

In Monday’s letter, the DOL opined that service providers are indeed independent contractors of the VMC, not its employees, at least under the facts of this particular case. The letter does not identify the specific VMC at issue, but the facts in the letter are going to be generally applicable to lots of VMCs.

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