AlterNet.org: Julie Gutman Dickinson http://adminwww.alternet.org/authors/julie-gutman-dickinson en Blatant Illegal Job Misclassification Causes Stress and Pain http://adminwww.alternet.org/labor/gig-economy-workers-contractors-or-servants <!-- iCopyright Horizontal Tag --> <div class="icopyright-article-tools-horizontal icopyright-article-tools-right"> <script type="text/javascript"> var icx_publication_id = 18566; var icx_content_id = '1060994'; </script> <script type="text/javascript" src="http://license.icopyright.net/rights/js/horz-toolbar.js"></script> <noscript> <a class="icopyright-article-tools-noscript" href="http://license.icopyright.net/3.18566?icx_id=1060994" target="_blank" title="Main menu of all reuse options"> <img height="25" width="27" border="0" align="bottom" alt="[Reuse options]" src="http://license.icopyright.net/images/icopy-w.png"/> Click here for reuse options! </a> </noscript> </div> <div style="clear:both;"></div><!-- iCopyright Tag --> <!-- All divs have been put onto one line because of whitespace issues when rendered inline in browsers --> <div class="field field-name-field-teaser field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even">Are gig economy workers independent contractors or indentured servants?</div></div></div> <!-- All divs have been put onto one line because of whitespace issues when rendered inline in browsers --> <div class="field field-name-field-story-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even"><img typeof="foaf:Image" src="/files/styles/story_image/public/story_images/shutterstock_349621280.jpg" /></div></div></div> <!-- BODY --> <!--smart_paging_autop_filter--> <p>What if millions of American workers were being denied health insurance, job security and the most basic legal protections, from overtime pay to workers compensation to the right to join a union? What if tens of billions of dollars in taxpayer revenues—money desperately needed to address everything from crumbling roads to education to health care—were never making it to local, state and federal treasuries? What if thousands of companies were violating the law with impunity?</p><p>That is exactly what is happening in the U.S. today, thanks to a <a href="https://newrepublic.com/article/119327/mcclatchy-employees-misclassification-widespread-and-hurts-workers" target="_blank">rampant practice known as worker misclassification</a>—illegally labeling workers as <a href="http://inthesetimes.com/working/entry/18224/independent-contractor-laws-department-of-labor" target="_blank">independent contractors</a> when in fact they are employees under the law. In some cases it’s occurring in plain sight, in others it’s more hidden—but regardless of the circumstances, it is taking an enormous toll on the country.</p><p>According to the <a href="http://www.epi.org/publication/independent-contractor-misclassification/" target="_blank">Economic Policy Institute</a> (EPI), workers misclassified as independent contractors can be found in nearly <a href="https://www.dol.gov/whd/workers/misclassification/" target="_blank">every industry</a>, and the phenomenon has grown considerably with the rise of the gig economy. Uber, the ride-hailing company, has become the poster child for worker misclassification, with <a href="http://www.mercurynews.com/business/ci_30091649/uber-faces-attacks-multiple-fronts" target="_blank">numerous lawsuits</a> alleging that Uber wrongly classifies its drivers as independent contractors. But Uber is hardly alone—examples of worker misclassification can be found in scores of new sectors, from housecleaners to technical workers.</p><p>Workers misclassified as independent contractors are also legion in <a href="http://www.epi.org/publication/independent-contractor-misclassification/" target="_blank">established sectors </a>of the economy, notably residential construction, in-home caregiving and the port trucking industry. Conditions for these workers have been compared to indentured servitude, and for good reason. Misclassification enables employers to get away with widespread wage theft and a range of other illegal practices.</p><p>In a <a href="http://www.epi.org/publication/independent-contractor-misclassification/" target="_hplink">2015 report</a>, EPI described the advantages to employers of misclassifying workers. “Employers who misclassify avoid paying payroll taxes and workers’ compensation insurance, are not responsible for providing health insurance, and are able to bypass requirements of the Fair Labor Standards Act, as well as the 1986 Immigration Reform and Control Act.” If this weren’t enough, the report continues, “misclassified workers are ineligible for unemployment insurance, workers’ compensation, minimum wage, and overtime, and are forced to pay the full FICA tax and purchase their own health insurance.”</p><p>How do employers get away with such violations? The answer is complex, involving anemic labor laws, lax enforcement of the protections that do exist and the savvy exploitation of both by companies in key industries. While some businesses misclassify their workers out of ignorance, others do it <a href="http://media.mcclatchydc.com/static/features/Contract-to-cheat/" target="_blank">very deliberately</a>, and have spent millions of dollars defending the practice.</p><p>A case in point is the port trucking industry, which was deregulated in the 1980s, leading to a proliferation of companies whose business model was predicated on the use of independent contractors. That model has resulted in a workforce of close to <a href="http://www.epi.org/publication/independent-contractor-misclassification/" target="_blank">75,000 truck drivers </a>at ports across the country laboring in mostly abysmal conditions. Among the indignities endured by drivers are such neo-Dickensian schemes as <a href="http://capitalandmain.com/latest-news/issues/labor-and-economy/port-truck-drivers-receive-negative-paychecks/" target="_blank">negative paychecks</a>—an inconceivable but well-documented occurrence in which drivers labor full time or more, yet actually owe money to the trucking companies they work for due to paycheck deductions for everything from truck payments to insurance to repairs.</p><p>In the last several years, port truck drivers and their labor, community and political allies have begun to successfully challenge misclassification, winning a series of legal victories, particularly in California. Every government agency that’s conducted an investigation into the practices of the port trucking industry—from the United States Department of Labor and National Labor Relations Board to the California Labor Commissioner and Economic Development Department—has determined that port drivers are employees, not independent contractors. The state’s labor commissioner alone has issued more than 300 decisions on misclassification of drivers in Southern California, and drivers have prevailed in every decision, winning over <a href="http://www.joc.com/trucking-logistics/drayage/california-offers-amnesty-drayage-companies-reclassify-drivers_20160506.html" target="_blank">$35 million in back pay</a>.</p><p>How can these successes be replicated and enhanced to end misclassification? Three strategies stand out:</p><p>• Litigation: The successful track record in California has proven that misclassification is vulnerable to sustained litigation. An important factor is whether elected and appointed officials are willing to aggressively pursue or support such litigation—if not, the efforts will yield far less favorable results.</p><p>• Policy changes: The enactment of policies that clamp down on misclassification, increase penalties and ban law-breaking companies from operating can have significant impact. However, as with litigation, this strategy depends on the presence of lawmakers willing to take on the issue.</p><p>• Worker organizing: In Los Angeles, port truck drivers frustrated with the exploitative conditions in their industry have waged a multi-year campaign to expose the practice of misclassification. That effort, which has included <a href="http://www.latimes.com/business/la-fi-port-trucker-protest-20150720-story.html" target="_blank">multiple strikes</a>, has been supported by a broad coalition of community groups—a potent combination that has played a crucial role in challenging the trucking industry’s “independent contractor” business model.</p><p>Taking on misclassification is important not just to workers, but to businesses and taxpayers as well. In the current system, law-abiding companies are forced to compete with low-road operators, creating an uneven playing field. Likewise, the <a href="http://www.latimes.com/business/la-fi-port-trucker-protest-20150720-story.html" target="_blank">cost to taxpayers</a> in lost revenues from employers that illegally misclassify workers as independent contractors is enormous, cheating government out of resources that could and should be used for the common good.</p><p>Reigning in worker misclassification and the abuse of so-called “independent contractors” is one of the more daunting challenges in taking on economic inequality. But any serious plan to address the nation’s economic divide must include an aggressive strategy to take on this costly epidemic.</p>  <p> </p> <!-- iCopyright Interactive Copyright Notice --> <script type="text/javascript"> var icx_publication_id = 18566; var icx_copyright_notice = '2016 Alternet'; var icx_content_id = '1060994'; </script> <script type="text/javascript" src="http://license.icopyright.net/rights/js/copyright-notice.js"></script> <noscript> <a style="color: #336699; font-family: Arial, Helvetica, sans-serif; font-size: 12px;" href="http://license.icopyright.net/3.18566?icx_id=1060994" target="_blank" title="Main menu of all reuse options"> <img height="25" width="27" border="0" align="bottom" alt="[Reuse options]" src="http://http://license.icopyright.net/images/icopy-w.png"/>Click here for reuse options!</a> </noscript> <!-- iCopyright Interactive Copyright Notice --> Fri, 29 Jul 2016 14:46:00 -0700 Julie Gutman Dickinson, Capital and Main 1060994 at http://adminwww.alternet.org Labor Economy Labor gig economy economy Uber worker misclassification labor Minimum-Wage Opponents Demand Their Freedom to Exploit http://adminwww.alternet.org/labor/minimum-wage-opponents-demand-their-freedom-exploit <!-- iCopyright Horizontal Tag --> <div class="icopyright-article-tools-horizontal icopyright-article-tools-right"> <script type="text/javascript"> var icx_publication_id = 18566; var icx_content_id = '806268'; </script> <script type="text/javascript" src="http://license.icopyright.net/rights/js/horz-toolbar.js"></script> <noscript> <a class="icopyright-article-tools-noscript" href="http://license.icopyright.net/3.18566?icx_id=806268" target="_blank" title="Main menu of all reuse options"> <img height="25" width="27" border="0" align="bottom" alt="[Reuse options]" src="http://license.icopyright.net/images/icopy-w.png"/> Click here for reuse options! </a> </noscript> </div> <div style="clear:both;"></div><!-- iCopyright Tag --> <!-- All divs have been put onto one line because of whitespace issues when rendered inline in browsers --> <div class="field field-name-field-teaser field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even">If the freedom of individuals -- to exploit, to injure and kill, to encite -- were allowed to trump all other rights, it would be a frightening world indeed</div></div></div> <!-- All divs have been put onto one line because of whitespace issues when rendered inline in browsers --> <div class="field field-name-field-story-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even"><img typeof="foaf:Image" src="/files/styles/story_image/public/story_images/screen_shot_2013-03-08_at_10.10.49_am.png" /></div></div></div> <!-- BODY --> <!--smart_paging_autop_filter--><p> </p><p>When President Obama proposed an increase in the federal minimum wage last month, you could almost hear conservative economists and pundits smacking their lips in anticipation. After all, there's nothing that gets this crowd going like mandating a wage increase, even if it's from the downright Dickensian $7.25 currently required to a still paltry $9, or just under $19,000 a year.</p><p>Minimum wage foes almost always base their opposition on the supposed damage that these laws do to the businesses that have to pay them and the workers who receive them. Despite reams of research to the contrary, they persist in claiming that minimum wage increases force businesses to lay off workers, hurting the very people who should benefit.</p><p>There is another argument, however, against minimum wage laws, one that was trotted out in <a href="http://www.slate.com/blogs/moneybox/2013/02/14/minimum_wage_research_the_case_against_a_minimum_wage_increase.html" target="_hplink">a column by Slate's Matt Yglesias</a>. The real problem with these laws is not that they hurt workers and their employers, asserts Yglesias, but that they infringe on our basic freedoms.</p><p>"You've got a guy who wants to give someone $8 to do something that'll take an hour and another guy who wants $8 and is happy to do the thing in exchange for the money," writes Yglesias. "Now Barack Obama's going to fine them for agreeing to trade $8 for the work? Seems perverse."</p><p>Perhaps unwittingly, Yglesias in these seemingly innocuous three sentences has called into question the very basis of legally mandated protections for workers, not to mention consumers, minorities and almost every other group you might care to mention. It's the hackneyed <a href="http://www.merriam-webster.com/dictionary/freedom%20of%20contract" target="_hplink">"freedom to contract" argument</a> -- or, as conservatives call it, <a href="http://www.aflcio.org/Legislation-and-Politics/State-Legislative-Battles/Ongoing-State-Legislative-Attacks/Right-to-Work-for-Less" target="_hplink">"the right to work"</a> -- so often used against unions. In other words, you have the right to suffer the indignity of taking whatever job the recessionary economy will throw your way.</p><p>A critical purpose of labor law is to address the unequal bargaining power between workers and their employers by, among other things, setting minimum standards for wages, safety and other terms and conditions of employment. For most of human history, working conditions were left to the discretion of those in power. The "freedom to contract" system that enshrined the right of employers to exploit, and workers to be exploited, was quite popular with the former. It wasn't as big a hit with the masses, however, who struggled to enjoy their putative freedom while living in wretched poverty, and not infrequently dying in horrific workplace accidents like the <a href="http://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fire" target="_hplink">Triangle Shirtwaist Fire</a>. One need only re-read Steinbeck's <em>The Grapes of Wrath</em> to be reminded of the illusory nature of such freedom.</p><p>Minimum wage legislation was first enacted at the state level in the early 20th Century, but these statutes were overturned by a U.S. Supreme Court infatuated with the rights of business to freely negotiate wages. In 1933 the <a href="http://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States" target="_hplink">first federal minimum wage</a> was established, but it was declared unconstitutional by the High Court, and another five years passed until a meager wage floor of 25 cents an hour was finally the law of the land.</p><p>In the ensuing decades, the only notable mass protests involving the minimum wage have been by those trying to raise it. While conservative economists and politicians have railed against the minimum wage, an abolitionist movement has yet to materialize among the tens of millions of Americans who have happily traded in their freedom for a little economic security. Nor have we seen demonstrations by workers clamoring to be rid of regulations that protect their health and safety.</p><p>If the freedom of individuals -- to exploit, to injure and kill, to encite -- were allowed to trump all other rights, it would be a frightening world indeed. Just read a history book if you don't believe me.</p> <!-- iCopyright Interactive Copyright Notice --> <script type="text/javascript"> var icx_publication_id = 18566; var icx_copyright_notice = '2013 Alternet'; var icx_content_id = '806268'; </script> <script type="text/javascript" src="http://license.icopyright.net/rights/js/copyright-notice.js"></script> <noscript> <a style="color: #336699; font-family: Arial, Helvetica, sans-serif; font-size: 12px;" href="http://license.icopyright.net/3.18566?icx_id=806268" target="_blank" title="Main menu of all reuse options"> <img height="25" width="27" border="0" align="bottom" alt="[Reuse options]" src="http://http://license.icopyright.net/images/icopy-w.png"/>Click here for reuse options!</a> </noscript> <!-- iCopyright Interactive Copyright Notice --> Fri, 08 Mar 2013 06:58:00 -0800 Julie Gutman Dickinson, AlterNet 806268 at http://adminwww.alternet.org Labor Economy Labor minimum wage Grapes of Wrath Steinbeck Matt Yglesias