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Gig companies expected to push California law to other states



App-based rideshare and delivery companies are likely to build on a new voting gain in California to limit potential employment-related debts they may face in other states, labor law experts say.

Proposition 22, a voting initiative approved by California voters earlier this month after heavily marketing companies such as Uber Technologies Inc., Lyft Inc. and DoorDash Inc., addresses the reality of today's workforce and will benefit employers and workers, it says. advocate.

Opponents, however, have criticized the voting initiative as a loss to workers.

The proposal extends app-based drivers from benefits that employers must provide, including sick leave, employee benefits and unemployment.

The initiative was in response to the approval of Assembly Bill No. 5 in 201

9, which established a legal test to determine who can be classified as an independent entrepreneur in California. [19659002] A state court decision upheld by an appellate court stated that Uber and Lift drivers did not meet the standard for independent contractors established by law.

Prop 22 won the approval of 59% of California voters after its proponents of economics, including Lift, Uber and DoorDash, all based in San Francisco, spent an estimated $ 205 million to promote the measure, which was more than 10 times the amount their opponents spent, including organized labor.

According to its rules, network companies will pay a quarterly healthcare subsidy to qualified app-based rideshare and delivery drivers, based on the number of hours worked, provided they have spent a minimum average of 15 hours per week of time allowed to complete rideshare requests or delivery requests. They can also get up to $ 1 million in "work accident insurance" to cover health care costs and lost income from injuries suffered while at work.

The measure also provides a minimum wage guarantee tied to 120% of the minimum wage. without maximum, and compensation for vehicle expenses, among other provisions.

DoorDash and Lyft said they intend to promote the concept behind the proposal elsewhere.

"We are ready to work with lawmakers and stakeholders everywhere and across the political spectrum for policies that protect Dasher flexibility and extend portable and proportionate benefits," DoorDash said in a statement.

Lyft said in a statement that it will "continue to fight for drivers, whether the fight is in the legislature or in the vote. box.

An Uber spokesman declined to comment.

The gig economy had created "a very significant change in labor law by creating this new type of worker", says Katherine S. Catlo. s, a partner of Kaufman, Dolowich & Voluck LLP in San Francisco.

The question of whether a worker is an employee or an independent entrepreneur "has always been binary, and in the modern economy the binary system no longer works because you have player workers," who can be drivers whenever they want, says Todd H. Lebowitz, a partner with Baker & Hostetler LLP in Cleveland.

"It would be great to have a middle ground" between workers and independent entrepreneurs, which the law has not allowed but which the California bill breaks out, he said.

Until now For example, employers may not allow workers to work more than 40 hours a week because they do not want to pay them overtime.

Ms Catlos said that Prop 22 is positive for workers because they will receive certain health benefits.

"I definitely sees this being used in other states and possibly at the federal level, "although it may face some court battles, she said. [19659002] Mr. Lebowitz said he expects workers in other sectors where ob Independent contractors are common – including trucks and logistics, and appliances and flooring installations – will seek similar arrangements.

Richard Reibstein, a partner with Locke Lord LLP in New York, who heads the law firm's independent contractor compliance and misclassification practices, says a report from the U.S. Government Liability Office 2015 and a report from the Bureau of Labor Statistics from 2018 shows that independence Entrepreneurs preferred their work arrangements over traditional employment.

to overlook this important stakeholder, the freelancers themselves, he says.

But Terri Gerstein, director of Cambridge, Massachusetts-based State and Local Enforcement Project at the Harvard Law Schools Work and Life Program who works with government agencies and officials working to enforce workplace laws, said s roposition says on a misleading way that workers will receive 120% of the minimum wage, but "excludes very much working time that drivers would do", including time to cross before being called to pick up a haulier or provide maintenance on their cars. for which an employee would be paid.

Large cities like New York may be the first to adopt similar legislation, says Teresa D. Teare, a partner with Shawe Rosenthal LLP in Baltimore.

Michael W. Kelly, a partner with Squire Patton Boggs in San Francisco, said the Biden administration could try to restore the proposal with an executive order.

"There is a real possibility that this will be something that the Biden administration will strive for, as it has appealed to key constituencies in the democratic base, including trade unions, and can be achieved without going through Congress," Kelly said.


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