New York Governor Lays Down Ultimatum on Gig Worker Rights

New York Gov. Andrew Cuomo (D) kicked gig worker rights out of the state’s budget discussion, instead creating a task force to study the issue. But he also provided lawmakers with an ultimatum.

If the issue isn’t resolved by May 1, the state’s labor department will be authorized to enact regulations protecting workers, Cuomo announced Jan. 21 as part of his executive budget proposal.

Policy is often negotiated alongside fiscal plans in the state’s budget process, which is kicked off by the governor. The state budget is due by March 31, before the next fiscal year begins.

One political expert says creating a task force is a way to delay a difficult decision that puts the governor between the state’s powerful unions and popular companies like Uber Technologies Inc. and Lyft Inc.

Some Albany insiders, companies, and lobbyists say the governor’s legislative proposal is vague. Several lawmakers and union leaders, however, are applauding Cuomo’s plan to further study whether many workers currently operating as independent contractors should instead be classified as employees, entitling them to benefits such as minimum wage, overtime, workers’ compensation, and the right to collectively bargain.

“We certainly are in a better place now, than we were at the end of last session,” New York State AFL-CIO President Mario Cilento said in an emailed statement. “In addition to creating a task force, the legislation would establish a framework to provide rights and protections to workers in the growing gig economy.”

Companies and business coalitions said they’re glad to have a seat at the table. “No matter the forum, we are ready to discuss solutions that provide workers with the protections they deserve while maintaining the flexibility they want and the economic growth vital to the state,” said Christina Fisher, a spokeswoman for Flexible Work for New York, a coalition of app-based technology companies, business groups, and civic organizations.

The Task Ahead

Cuomo and other New York lawmakers have said they plan to follow California’s lead and will address gig worker rights this session, which ends June 2.

The measure would likely look different from California’s given ongoing debate and lawsuits associated with the Golden State’s new law, A.B.5, as well as a desire to allow gig workers to unionize, lawmakers have said. California’s law makes it much harder for platform and other companies to classify workers as contractors, and applies to workers in an array of other settings who have been treated like self-employed entrepreneurs.

Cuomo called for the creation of a nine-member “marketplace worker classification task force,” including representatives from impacted businesses, labor groups, and workers. Seven members will be appointed by the governor, and the other two by Senate and Assembly leaders, according to the budget bill.

The panel has until May 1 to present legislative recommendations on, but not limited to, wages; health and safety protections; specific categories of benefits; proper worker classification; the criteria to determine if a worker is an employee; collective bargaining; and anti-discrimination, opportunity, and privacy protections. It must also recommend any changes needed to current state law.

Delegating to the State

If the matter isn’t resolved, Cuomo’s bill would give the state Department of Labor commissioner authority to create and put in place regulations, according to the proposal.

The bill sets out guidelines based on current state law to help the commissioner decide who should be considered an employee or independent worker in the state. Any regulations would still have to go through the state’s rulemaking process, according to the governor’s office.

The governor’s office said it plans to get the task force up and running before April.

Legislation stemming from the panel’s recommendations doesn’t necessarily need to be voted on by May 1, but an agreement would need to be reached, otherwise the issue would go before the labor department, according to the governor’s office.

It wouldn’t be the first time the state’s labor agency had to make a decision on employee status. In 2016 it determined that a pair of former Uber drivers were employees, rather than independent contractors, thus making them eligible for unemployment insurance benefits. That decision was later affirmed by an independent appeal board, whose members are appointed by the governor.

The state has not publicly gone after Uber or other platform companies for unpaid unemployment insurance and other taxes since that time.

Power Dynamic

Choosing to create a task force shows Cuomo hasn’t resolved the fundamental issue, which is whether to compromise or push for the maximum to satisfy the unions, said Gerald Benjamin, a political science professor and the director of The Benjamin Center For Public Policy and Initiatives at SUNY New Paltz.

The unions, which are a major political player in the state, say app-based workers should have the same rights and protections as all other employees, unless they’re truly independent contractors.

“I think he has to deliver for the unions because it’s a core element of his constituency,” Benjamin said, adding that there is also a big push from industry, which has public support for services such as Uber.

Moving the discussion to the end of the legislative session, however, gives the Senate and Assembly a larger role. They can’t change language in the budget bill, they can only negotiate, Benjamin said.

State Sen. Diane Savino (D), who proposed gig worker rights legislation last year, said she thinks it makes sense to take the decision out of the budget. “What you don’t have here is the specter of the budget hanging over your head,” she said.

Savino and Assemblyman Marcos Crespo (D), were working on crafting legislation that would include collective bargaining. Savino said she now plans to hold off to see what the task force proposes. It’s “confusing” to have multiple proposals on the table, she said.

“I do think we’ll get it done,” Savino said.