States like New York and California have made gig workers eligible for jobless benefits and sick days. But the companies have resisted complying.
By Noam Scheiber
March 24, 2020 - The New York Times
In a typical week, Jerome Gage, a Lyft driver in Los Angeles, makes $900 to $1,000 before expenses during roughly 50 hours on the road. This week, with most of the state holed up and demand for rides evaporating, he expects to work even longer to make far less than half that amount.
Given the option, Mr. Gage said, he would stop wasting his time and risking his health and file for unemployment benefits. But unlike workers employed by restaurants, hotels and retail establishments, gig workers like Uber and Lyft drivers typically have not been able to collect unemployment benefits or take paid sick leave.
In a call with analysts last week, the Uber chief executive, Dara Khosrowshahi, alluded to the problem, suggesting that his hands were tied because Uber drivers are independent contractors. “This situation certainly demonstrates the downside of attaching basic protections to W-2 employment,” he said.
And in a letter to President Trump on Monday, Mr. Khosrowshahi asked that any economic stimulus or coronavirus-related legislation provide “protections and benefits for independent workers,” along with “the opportunity to legally provide them with a real safety net going forward.” A Lyft spokeswoman said her company was also pushing to extend any forthcoming stimulus to drivers, and said, “The vast majority of drivers on the Lyft platform use it to earn supplemental income,” rather than as a primary job.
But for many drivers, the problem is not a legal void. It is that the companies they work for have not complied with existing laws or agency rulings.
The highest-profile case is in California, which passed a law last year requiring companies to classify workers as employees if the companies control how they do the work, or if they hire workers to perform a job central to the business.
The bill’s author has said she intended the law to apply to Uber and Lyft drivers, which would make them eligible for unemployment benefits and state-mandated sick leave. Legal experts have agreed with this interpretation. But Uber launched a legal challenge to the law late last year, and the two ride-hailing companies are investing tens of millions of dollars in a November ballot initiative that would effectively exempt them from it.
In the meantime, the companies have chosen not to report drivers’ income to the state, as is required of employers. While the companies’ legal challenges play out, the state is failing to approve many unemployment claims from drivers, potentially leaving thousands in the lurch as their earning power collapses.
Loree Levy, a spokeswoman for the California Employment Development Department, which oversees unemployment benefits, said by email that applicants who were not eligible for benefits because the state lacked their wage information could follow up, and that the department would investigate, awarding benefits if it deems them misclassified. She said the department investigated many such cases even without a follow-up, but declined to say whether it was working to require Uber and Lyft to report drivers’ wages.
Employers are obligated to contribute to a state unemployment insurance fund, but the companies’ failure to do so does not disqualify workers from receiving benefits. The state can pursue unmet payroll-tax obligations later.
Uber and Lyft declined to comment on the situation in California, but both companies have announced that they would provide pay to drivers nationwide who were diagnosed with Covid-19 or were asked by a public health authority to isolate themselves.
The stalemate has set up a showdown with increasingly desperate drivers. On March 11, Shannon Liss-Riordan, a Boston-based plaintiff’s lawyer who has won rulings against Uber and Lyft over the employment status of drivers, filed complaints seeking to force the companies to follow the state’s new law immediately, giving drivers access to unemployment benefits and sick days.
“It is very unfortunate that such a crisis may be necessary to prompt these companies into actually complying with the law and extending employment protections to their drivers,” Ms. Liss-Riordan said in an email.
Her complaints are pending in federal court.
While the cases play out, drivers around the state have stepped up efforts to demand that Uber and Lyft provide them with employment protections. A union-backed group called Mobile Workers Alliance, which Mr. Gage is involved with, began circulating a petition Friday demanding that the gig companies abide by the state’s new law deeming them employees. The petition has collected more than 6,000 signatures.
Lisa Opper, a Lyft driver involved with a group called Rideshare Drivers United, which held demonstrations on Thursday in San Diego, Los Angeles and San Francisco, said she typically worked 40 to 50 hours per week and made $900 to $1,000 before expenses. She made $226 the week before last, after which she stopped driving out of concern for her health.
“I won’t risk it,” Ms. Opper, who is 60 and diabetic, said on Friday. “The virus is airborne, and I had three or four people last week coughing.” She said she had been driving with a blue surgical mask but didn’t have access to the N95 mask that experts say is most effective at stopping the spread of the illness.
Ms. Opper said she planned to file for unemployment insurance and hoped to get benefits, at least on appeal. “I just believe Uber and Lyft are ignoring the law,” she said.
California is not the only state where many Uber and Lyft drivers have not received the employment protections to which they appear to be entitled. In 2018, New York’s unemployment insurance appeal board, its highest executive branch authority on such questions, ruled that three Uber drivers were eligible for unemployment benefits, along with all “similarly situated” drivers.
But New York State has yet to require Uber, Lyft and other gig economy companies to contribute to its unemployment insurance fund on workers’ behalf ・a sum that would likely be worth at least tens of millions of dollars ・while it identifies which drivers are “similarly situated” to those in the appeal board’s ruling.
The companies have so far declined to report drivers’ wages to the state, forcing drivers to undertake a monthslong bureaucratic process to prove their employment status and secure unemployment benefits. An Uber official said the company had received a request from the state for driver wage information over the weekend and was “likely” to comply.
Still, an Uber spokesman said the company believed the appeal board’s 2018 ruling “uniquely applies to the three claimants” because Uber has changed many of its policies affecting drivers in recent years.
But Nicole Salk, senior staff attorney at Legal Services NYC, who has represented drivers seeking unemployment benefits, said she was personally aware of dozens of drivers who had been deemed employees by the state in the past few years.
The problem, Ms. Salk said, is that many other drivers have abandoned the process when faced with bureaucratic hurdles. “There are at least three additional questionnaires,” after the initial application, she said. “It takes months and months.” Ms. Salk said she represented a driver who applied for benefits during the third week of December and had yet to complete the process.
Last year, the federal Department of Labor and the National Labor Relations Board issued findings contending that gig workers are contractors, not employees, but those findings are not binding on state agencies that oversee unemployment benefits.
A spokesman for Gov. Andrew M. Cuomo of New York said the state had requested disaster unemployment assistance from the White House that could make benefits available to drivers and other gig workers. Congress, for its part, is working on a stimulus bill well in excess of $1 trillion that could make such benefits available nationally.
But even if the contractor benefits are enacted, they may not apply to drivers in states where they have been deemed employees, according to Zubin Soleimany, a lawyer for the New York Taxi Workers Alliance, a driver advocacy group.
Mr. Soleimany’s group is pushing for New York to expedite the application process for those seeking routine unemployment benefits so that drivers can receive them promptly, like other workers. “It’s a completely unacceptable outcome now,” he said.