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Pandemic Inspires Fresh Thinking on Safety Net for Gig Workers

March 27, 2020, 4:52 PM

Edan Alva hadn’t earned enough driving for Lyft Inc. to pay the rent when he felt the flu-like symptoms come on. A full-time driver considered an independent contractor, he doesn’t have the sick time guaranteed to employees.

“I worked through the sickness and paid the rent,” said Alva, an organizer for the activist group Gig Workers Rising, who has driven for five years in California’s Bay Area.

Experiences, such as Alva’s in January, can now be wielded to show the gaps in protections for workers that existed before the pandemic presented drivers with a choice between exposing themselves to illness or facing bills without income.

“Drivers shouldn’t be forced to struggle with tough choices similar to the one I made,” he said.

There’s already evidence that it took the pandemic to alter the discussion of whether a safety net is warranted for gig workers and independent contractors. Attorneys for workers in ongoing litigation against Uber Technologies Inc. and Lyft cited the virus as a reason for an emergency measure to give workers benefits. And for the first time, a federal law has created some limited protections for gig workers, potentially adding fuel to discussions in California and elsewhere about whether those workers deserve some treatment in between employee and contractor.

“Suddenly, we are seeing just how important these workers are and it’s absolutely exposing the vulnerability and the problematic way we have cast off this workforce,” said Erin Hatton, associate professor of sociology at the University at Buffalo, who specializes in labor movements and the gig economy. “It’s exposing the tensions and vulnerabilities we’ve tried to ignore.”

The biggest players in the gig economy—Uber, Lyft, DoorDash Inc., Postmates Inc., and Instacart Inc.—have all taken measures to compensate their workers during the pandemic. In recent weeks, the companies have offered to pay workers who have the virus while they are sick, providing services to the communities affected and pushing for emergency protections. They continue to defend their reliance on contractors, which they say provides flexibility for workers as opposed to a traditional employment relationship.

Uber’s support of a provision in the Senate virus relief package that could make drivers, delivery workers, and other contractors eligible for unemployment insurance followed the company’s renewed push of a proposal that would create a portable benefits program for contractors. It would provide some safety-net provisions while allowing companies to still classify those workers as contractors. The proposal wouldn’t guarantee that the drivers have equal benefits to employees, however.

“I am committed that Uber will do its part to advocate for new laws that permit companies like ours to provide additional benefits for independent workers going forward.” CEO Dara Khosrowshahi said after the bill passed the Senate.

Legal Tactic Amid Pandemic

To be sure, the debate over classification of gig workers remains centered on whether they should be employees, as worker advocates and unions want, or independent contractors.

The companies have balked at legislation such as Assembly Bill 5 in California, which established a three-part test for classifying workers as contractors, as well as similar proposals in other progressive states, including New York.

In Massachusetts, two groups of drivers suing Uber and Lyft asked a federal court to immediately reclassify them as employees to help fight the spread of the coronavirus, in motions for emergency preliminary injunctions filed on March 23.

The drivers can’t afford to stop working for Uber and Lyft, and so are forced to “drive many passengers each day, including those who have been ordered to self-quarantine or who are coming from high-risk locations,” they argue. Prior to the emergency motion, the judge in the Lyft case had rejected the drivers’ request for an order to force the company to stop classifying them as contractors.

Lyft spokesperson CJ Macklin told Bloomberg Law in an email that the filing represented an attempt by “opportunistic lawyers to capitalize on this national emergency” and said it was “callous and insidious politics.”

She said forcing Lyft to adopt an employment model in the midst of a crisis would result in the “widespread elimination of work for hundreds of thousands and the immediate interruption of essential services for vulnerable populations. It will hurt drivers and at-risk communities at a time when they need our services the most.”

Sarah Clarke, an organizer for Instacart workers, said many shoppers had difficulty getting tested for Covid-19, which made it hard to prove they should be eligible for the 14 days’ pay the company guaranteed. Instacart saw a surge in the number of workers signing up to deliver groceries, as people lost their work and the demand for grocery delivery grew.

“Workers who can afford to stay home are doing so, and everyone else is still out there working, even if they are sick,” Clarke said.

Instacart workers are threatening to strike Monday unless the 14-day-pay guarantee covers pre-existing conditions, according to the Gig Workers Collective.

Not Just Gig Workers

Alva told his story on a Zoom call with journalists, union leaders, and San Francisco city officials, arguing that gig workers need better protections, including minimum wage, unemployment benefits, and overtime.

They want the city to enforce California’s A.B. 5 and its so-called ABC test, which makes it harder for employers to classify workers as contractors. The law, and similar proposals it sparked, was contentious among employers before Covid-19 put gig workers on the frontlines.

“People are sheltering in place and gig workers are rising to the challenge. They are facing this perilous situation head on,” said Jennifer Esteen, SEIU 1021’s vice president of organizing. “They should get employment compensation for time off and safe working conditions right now with this infectious pandemic.”

The effort goes beyond the gig economy to industries that have long relied on independent contractors, advocates say, to skirt paying benefits.

Organizers and advocates, including for service workers and farm workers, say that the virus has exposed broader instability for vulnerable and low-wage workers. Their proposals include broadening the unemployment benefits system and offering universal paid leave, as well as addressing the widespread use of contractors.

In New York, the Nail Salon Workers Association on March 26 released a platform for workers in the industry who are out of work. Salon workers say they frequently experience problems with wage theft and lack of health protections. The group’s platform includes a push for New York to adopt the ABC test.

“No longer are we speaking in theoretical terms or what ifs,” said Luis Gomez, the association’s organizing director. “We are talking about real life situations. Low-wage workers are essential to the fabric of society, whether it’s tipped workers or gig workers, they are living check to check.”

But people are realizing that employers shouldn’t be responsible for providing the safety net, said Aaron Swerdlow, an attorney with Weinberg Gonser, who represents companies. He said companies also take optics into consideration, and the desire for good public relations could influence policies.

“This brings companies to say, ’Why is it on us? Why isn’t there a safety net?’” Swerdlow said.

He said the stimulus package highlights the idea that people and companies are willing to provide more.

“I think that the bailout for independent contractors is driving home to all of us just how many people in America are part of the gig economy, and seeing how important it is for economic stability,” he said.

The push will likely come from politicians and unions, as most employers prefer to use contractors when they can, said Marta Fernandez, a attorney who represents employers with Jeffer Mangels Butler & Mitchell. Still, she said there are jobs that are appropriate for contractor status, and companies will defend that.

“Employers and employees and unions can get on the same page to identify the gaps and see how to prepare for the next pandemic,” Fernandez said.

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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