By Allen Smith, J.D.
May 15, 2019 - SHRM
Uber drivers are independent contractors, not
employees, the National Labor Relations Board's general counsel said in a
memorandum issued May 14, making unionization harder for drivers. Uber's
labor costs probably would rise 20 to 30 percent if courts treated them as
employees, industry experts say. We've rounded up articles from SHRM
Online and other trusted news sources on gig workers.
Drivers Complain About Low Pay
Uber lost approximately $2 billion last year while its competitor Lyft lost nearly $1 billion. Investors have suggested the companies might need to cut their labor costs to become profitable. But drivers often protest that their pay is too low. The general counsel's memo follows a Labor Department opinion last month that workers at an unnamed company similar to Uber were contractors rather than employees. The memo will result in the dismissal of three formal accusations across the country that Uber has violated federal labor law. "Drivers across the globe are organizing and demanding rights," said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, responding to the memo. "The road may be long and difficult, but one way or another Uber will have to answer to its workers."
Gig Drivers Recently Went on Strike
Just before Uber's debut as a publicly traded company
on May 10, its drivers and Lyft drivers went on strike on May 8, protesting low
pay and arbitrary terminations. Drivers' groups in various cities organized the
strikes. The drivers want a 10-percent cap on the companies' share of each fare,
an hourly minimum wage and compensation for time spent traveling to pick up a
rider.
Companies Can Offer Gig Workers Benefits
The proportion of gig employees—independent workers
who contract for short-term assignments—is growing, and so is competition for
their services. To maintain a healthy relationship with the best of them,
employers need to offer more than good pay. But that presents a challenge: How
do you offer gig workers benefits while avoiding traps that could lead to their
being classified as full-time employees?
Broadened Definition of Independent Contractor
The NLRB earlier this year broadened the definition of who is considered an independent contractor, reducing the number of individuals who may unionize or bring unfair labor practice charges. The board has returned to a test that takes into account a variety of factors, including the relationship the company and individual think they created and how much control the company has over the person's work. But HR professionals need to keep in mind that there are other tests for independent contractor status under other laws, such as California's wages orders, that may produce different results.