Today’s News & Commentary — July 16, 2015
More news on Uber from the Los Angeles Times. Yesterday, the chief administrative judge of the California Public Utilities Commission suggested that Uber be suspended in California and fined $7.3 million. For months, Uber has failed to comply with state regulations meant to ensure that drivers fairly provide rides to all passengers. The 2013 California law that legalized ride-hailing companies requires those companies to report the number of requests for rides from people with service animals or wheelchairs, how many of those rides were completed, and other information such as date, time, Zip Code, and fare paid. Uber’s 2014 report, however, did not include this data.
The Los Angeles Times also reports that Governor Jerry Brown has signed a bill providing labor protections to pro sports cheerleaders. The new legislation designates cheerleaders as employees, rather than independent contractors, ensuring that cheerleaders receive minimum wage, workers’ compensation, paid sick leave, meal and rest breaks, and other rights and benefits. Assemblywoman Lorena Gonzalez (D-San Diego), who authored the bill, said she hoped that the new state law would spur the National Football League to enact similar protections for all of its teams.
When it comes to retirement benefits, small companies greatly lag behind larger ones. According to an estimate by the Government Accountability Office, only 14% of businesses with 100 or fewer employees even sponsor a retirement plan, and employees at the smallest companies pay administrative fees that, on average, are twice as high as those paid by employees at larger companies. According to the New York Times, a number of start-ups are hoping to address that gap by offering 401(k) plans tailored for small companies. These companies sell their services for a fixed monthly fee, and build portfolios “around low-cost, institutional stock and bond index funds.” They also let employers choose whether they want to match their employees’ contributions or not.
Politico has more coverage on the DOL’s interpretation of the Fair Labor Standards Act’s definition of “employ.” It also notes that the American Federation of Teachers has created a group, AFT Members for Bernie, to protest the AFT’s endorsement of Clinton.
At the Washington Post, Lydia DePillis also covers the DOL’s new interpretation and the status of the gig economy. As DePillis notes, Clinton has declared that she will “crack down” on misclassification of workers — but now, with the release of the new DOL interpretation, Obama already has. That’s not to say there isn’t still work to be done. DePillis explains that “if more workers end up being correctly classified as independent contractors,” Clinton could, for example, find “better ways to protect them” by extending “safety net protections such as unemployment insurances and workers compensation to more people.”
In the national/international arena, the Los Angeles Times covers a $20 million settlement between an Alabama marine construction company and over 200 Indian guest workers.The settlement resolves 11 lawsuits against Sigal International, which brought guest workers to the U.S. with promises of green cards and permanent residency. According to the Southern Poverty Law Center (SPLC), which represented some of the workers, the men did not receive green cards, and Sigal forced the workers to pay $35 per day to live in cramped, squalid labor camps. The company also sent security guards to detain workers who complained. In February, in a case brought by the American Civil Liberties Union on behalf of five of the guest workers, a New Orleans jury found that Sigal International was liable for labor trafficking, fraud, racketeering, and one case of false imprisonment, and delivered a $14-million verdict against Sigal. The company has since declared bankruptcy, so the settlement must be approved in bankruptcy court. According to Alan Howard, chairman of the SPLC board, the workers “persevered and won justice. This agreement sends a powerful message that guest workers have rights and cannot be exploited.”
Also in international news, the New York Times has more information on the abuses of foreign laborers working in Qatar. Several U.S.-based companies are involved in building World Cup-related sites, and they rely heavily on migrant laborers. Although the U.S. companies do not directly employ these laborers, thousands of them work on projects that the companies manage or oversee. Thus, “American construction companies face labor issues similar to the ones confronting United States clothing or technology businesses that profit from cheap labor abroad.” Some of these companies have attempted to improve labor practices, but as others have noted, these attempts are unlikely to have a practical impact. Because construction companies pass responsibility for worker welfare to subcontractors, there is little to no accountability.