Weekend News & Commentary — March 18-19, 2017

On the campaign trail, President Trump pledged that he would create 25 million jobs over the next decade.  Will he keep his promise?  The New York Times thinks not.  The Editorial Board takes aim at the President’s “wheezing jobs effort,” pointing to his recently released budget proposal — which would cut the Department of Labor’s budget by 21% and eliminate several important jobs programs — and his neglect of important job markets, such as the clean energy sector.

President Trump’s labor policies have also attracted the ire of unions and labor leaders.  The SEIU and Food Chain Workers Alliance have announced a general strike on May 1 (#May1Strike), coinciding with International Workers’ Day.  More than 300,000 food chain employees and 40,000 service workers are expected to turn out, The Hill reports, to protest the Trump administration and in particular its hardline stance on immigration.

Meanwhile, the administration’s immigration crackdown has worsened the farm labor shortage in California, The Los Angeles Times reports.  Although farm wages have shot up, few Americans have been willing to accept those jobs — casting doubt on President Trump’s claim that tougher borders will help American-born workers.

Disney will be paying $3.8 million in back wages to 16,339 of its “cast members” as part of a settlement with the Department of Labor.  The DOL’s investigation revealed that Disney resorts in Florida deducted a “costume” expense that caused some employees’ hourly rates to fall below the federal minimum wage.  The Christian Science Monitor has more.

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Today’s News & Commentary — March 14, 2017

While Uber attempts to discourage the unionization of drivers in Seattle, some drivers are challenging the municipal law giving drivers the right to organize.  According to the Seattle Times, “the drivers are seeking a temporary restraining order barring the city from enforcing the law — the first of its kind in the country — saying it goes against federal labor and privacy laws, as well as violates their rights to free speech and association.”  The lawsuit is being led by the National Right to Work Foundation and the Freedom Foundation.  The drivers primarily argue that the National Labor Relations Act pre-empts the municipal law.

Another innovative municipal law has gone into effect, in San Jose, CA.  The Mercury-News notes that ” San Jose businesses with 36 or more employees must now offer extra shifts to part-time workers before hiring new staff.”  Under the Opportunity to Work measure, “companies must offer — in writing — extra work hours to existing qualified part-time employees.  If those employees aren’t qualified or decline the extra hours, an employer can then hire additional workers to fill the shifts.  The idea, advocates say, is to give existing workers access to extra hours to boost their paychecks.”

Muslim workers in Europe suffered a legal setback in seeking to assert their right to wear the hijab in the workplace.  The Washington Post reports that “The European Court of Justice issued a non-binding ruling Tuesday that employers can prohibit the Muslim headscarf in the workplace, setting an important precedent for a continent in the midst of a fraught political climate.”  The ECJ concluded that rules against the wearing of the hijab in the workplace were in fact rules against the visible wearing of religious signs, and thus not direct discrimination.  Notably, “in the absence of official internal regulations prohibiting what employees can wear to work, the court suggested, Muslim women have a stronger case for wearing the hijab to the office.”

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Today’s News & Commentary — March 2, 2017

The Wall Street Journal reports that the Trump Administration has developed a new draft policy deemphasizing the role that the World Trade Organization plays in trade enforcement.  Instead, the Administration would rely more aggressively on U.S. law and “all possible sources of leverage to encourage other countries to open up their markets.”  The draft document outlining this strategy could be released as early as today.  In his speech to Congress on Tuesday, President Trump said, “I believe strongly in free trade, but it also has to be fair trade. It’s been a long time since we had fair trade.”  Trade was a popular issue for President Trump in his campaign, and he vowed to be tougher on enforcement.  Read more here.

While some workers in the U.S. have celebrated the United States’ withdrawal from the Trans-Pacific Partnership (TPP), the New York Times published an article focusing on the workers who fear that the United States’ departure from the agreement could lead to an abandonment of labor and environmental commitments in TPP countries.  Do Thi Minh Hanh, a Vietnamese labor activist, fears that “[t]he Vietnamese government will use this as an excuse to suppress the labor movement” because “[t]hey never wanted to have independent unions in Vietnam.”  The United States and Vietnam had a side agreement, or consistency plan, to ensure compliance with certain basic labor standards including criminalizing forced labor and the elimination of a government ban on independent unions.  While critics of these protections have maintained that they are largely ineffectual, some proponents including law professor David A. Gantz, an expert on international trade agreements, argue that the provisions in the TPP “might have made a real difference.”

Uber continued to make headlines when a video of Travis Kalanick, Uber founder and CEO, arguing with an Uber driver, Fawzi Kamel, became public.  Responding to Kamel’s contention that Uber has slashed rates for drivers, Kalanick told Kamel that he needs to “take responsibility” for his own issues.  Yesterday, in a memo to workers at Uber, Kalanick stated that “[i]t’s clear this video is a reflection of me” and “the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up.”  The video’s release and Kalanick’s apology comes shortly after former-Uber engineer Susan Fowler published a blog post exposing sexism at the company, which garnered significant media attention.  In an optimistic New York Times piece, Farhad Manjoo opines that the Uber scandal “feels like a watershed” and predicts a change in the treatment of women in tech.  In an industry where Fowler’s complaints ring true for many, diversity advocates suggest that the recent actions by Uber to address the incident are only the beginning.

Veronica Escobar, an El Paso County Judge, authored an op-ed in the New York Times, describing how President Trump’s immigration policies could harm the U.S. and in particular, her community of El Paso.  She highlighted the jobs created by cross-border trade and the contributions of dreamers, undocumented immigrants who entered the United States as children, to the U.S. economy.  She says that if given work authorization, dreamers are estimated to increase government revenues by $2.3 billion.  Read more here.

Gig News: Brazilian Judge Finds Uber Driver Is Employee

A labor court judge in the state of Minas Gerais, Brazil has found that an Uber driver there is an employee of the company, taking the debate over the classification of drivers to another country.  The Brazilian newspaper Zero Hora reports that the decision is the first in Brazil to recognize Uber as an employer of drivers.  According to Reuters, the judge “ordered Uber to pay one driver around 30,000 reais ($10,000) in compensation for overtime, night shifts, holidays and expenses such as gasoline, water and candy for passengers.”  Uber announced that it will appeal the decision.  The ruling only applies to a single driver, but could open the door to more challenges.

Brazilian news portal G1 notes that the judge applied a multi-factor test for employment status under Brazilian law.  Key factors included that a) users are assigned a driver by Uber, unable to select from options; b) Uber (not the passenger) pays drivers at the end of each week after withdrawing a percentage, thus going beyond simple mediation of passenger-driver business; c) transport is Uber’s primary business, as partially evidenced by its investment in automobiles vehicles; and d) Uber drivers are submissive to the company, forced to comply with strict rules in order to drive for the company.

Zero Hora also emphasized that the judge found that drivers were encouraged to drive regularly despite flexibility, and that Uber engaged in a hiring process by approving drivers.

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Guest Post: A Third Category Is Not The Right Path for Gig Workers – A View From The UK

Hannah Reed works on employment and labour law policy for the UK Trades Union Congress (TUC).  She is currently attending the Harvard Trade Union Program

The recent Uber case in the UK was hailed by unions as a monumental victory, securing basic ‘worker’ rights to rest breaks, paid vacation time and the national minimum wage for 30,000 Uber drivers in the UK.

The decision is certainly welcome and may have useful implications in the US.  But no one should presume that the issue of rights for gig workers is now settled or that legislators are off the hook. The case will be appealed.  Uber continues to argue its drivers are self-employed and that the tribunal decision would require it to adjust its business model.  The current ruling is also not binding for other groups of gig workers.

The intense media interest in the case has, however, helped to reignite policy debates on who should qualify for which statutory employment rights and whether protections should be extended to those working on the edge of the labour market.

Following pressure from unions, think tanks and civil society groups, the UK government has commissioned a review into modern employment practices.  The House of Commons Business Committee has similarly launched an inquiry into the Future World of Work and Rights of Workers.

The central question for both reviews is the whether the law needs to be modernised to respond to the new ‘gig economy.  Despite the rapid expansion in temporary, insecure employment and complex supply chains, UK employment law remains wedded to the notion that permanent, stable employment is the norm.  Those that do not meet this norm are simply not protected.

But whilst some US commentators are advocating the creation of third category of worker in response to the growth of the gig economy, the opposite debate is starting to take place in the UK.

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Gig News: Uber, Lyft & Airbnb Respond to Trump’s Muslim Ban

Major players in the gig economy have responded to President Donald Trump’s action to bar refugees and citizens of seven Muslim countries from entering the United States.

Most controversially, in the face of a 1-hour strike at New York’s John F. Kennedy International Airport yesterday by the union representing 19,000 New York taxi drivers in protest of Trump’s Muslim ban, Uber suspended surge pricing.  In effect, Uber broke the strike despite their claim that it wasn’t their intent to do so.  Both Buzzfeed and Slate report on a movement by consumers to cease using Uber and delete the application in response.

Uber also released a email sent to employees by CEO and co-founder Travis Kalanick, in which he stated Uber is “working out a process to identify…drivers [affected by Trump’s executive order] and compensate them pro bono during the next three months to help mitigate some of the financial stress and complications with supporting their families and putting food on the table.”  Kalanick serves on President Trump’s business advisory group.

Uber’s chief rival Lyft, on the other hand, released a much stronger statement.  Per Mashable, in an email to consumers entitled “Defending Our Values,” co-founders Logan Green and John Zimmer called Trump’s order “antithetical to both Lyft’s and the nation’s core values,” noting they stand firmly opposed to the action.  Most notably, Green and Zimmer stated that Lyft is “donating $1,000,000 over the next four years to the ACLU to defend our constitution.”

Airbnb, for its part, “has offered free accommodation to people left stranded by President Donald Trump’s travel restrictions,” according to the BBC.

Guest Post: Uber Retirement

Paul M. Secunda is Professor of Law and Director, Labor and Employment Law Program at Marquette Law School.

Although by no means a new question regarding retirement, the noteworthy growth of gig companies in the sharing economy has renewed concerns that even more American workers will lack access to employment-based retirement plans.  Although some argue that the gig economy offers workers advantages including more independence and flexibility, company-sponsored retirement saving is not one of them.  This is a dangerous state of affairs, as employment-based retirement plans make up a critical part of an individual’s strategy for retirement security.

Such retirement plans, like the nearly-ubiquitous 401(k) plans, provide a necessary bulwark against destitution in old age, especially given that Social Security provides only partial income replacement and few Americans have put away much in private savings.  Yet, independent contractors, which is how most gig companies classify their workers, are approximately two-thirds less likely than standard employees to have access to an employer-provided retirement plan.

Much academic and judicial ink has already been spilt over whether Uber drivers and other members of the sharing economy are members of the so-called “contingent” workforce or “precariat” (part-time, leased, temporary, and per diem workers), not entitled to receive retirement benefits as part of their employment.  Whether these employees are statutory employees is of utmost importance because it largely determines whether gig workers are covered by employment laws, as most such laws center on the employer-employment relationship.

What all these jobs have in common is that the work activity is happening outside of the traditional safety net of employment and are highly unstable.  Whereas statutory employees are covered in the United States by numerous labor and employment law statues that provide security and protection in the workplace, workers in these alternative work arrangements are not.  Once stable employment relationships have given way to relationships that are much more arms-length, regardless of whether it is a contractor situation, temporary employment, or a one-time encounter.

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