But Like California’s Fumbled Law, Cuomo’s Plan Could Spell Disaster for Creative Workers
It seems New York State wants to follow California down a legislative path to protect Uber and other gig economy workers by ensuring they get benefits and rights.
The only problem is the California law has led to all kinds of unintended consequences for writers, musicians, dancers, artists and probably home health workers. These people who are working as independent contractors, either by choice or by the marketplace, are losing work.
Democratic New York Gov. Andrew Cuomo, like California’s Gavin Newsom, is recognizing that huge numbers of people are moving into gig economy work. But there are no protections from “economic exploitation,” Cuomo said in his annual State of the State speech earlier this month.
The California law has led to all kinds of unintended consequences for writers, musicians, dancers, artists who are working as independent contractors and are losing work.
There were no specifics. But Cuomo’s model is California, which is requiring companies to consider independent contractors as full-time employees. Independent contractors have been defined by a series of conditions, like working on their own schedule, or with their own equipment or without oversight and direction. Companies like Uber, however, have been moving to control more aspects of worker conditions without affording benefits.
And, all this is happening as coronavirus has the potential to explode work as the gig economy has known it. Most gig economy jobs involve public settings that may be seriously disrupted by the spread of illness.
Just look at the sudden shutdown of the big SXSW concert exhibition in Austin this week. Multiply the example by the number of cities and states that may find themselves doing the same.
A Jobs Minefield
As Crain’s New York noted, Cuomo could be stepping into a legal and jobs minefield.
Crain’s detailed the case of the San Jose Jazz Festival. Last year it presented 1,000 musicians from around the world in 326 performances. Normal practice for most musicians was to have the bandleader get paid by the festival, with musicians paid as independent contractors. Under the new California law, the festival will be forced to tell musicians they must either become employees of San Jose Jazz or incorporate. In either case, someone will be responsible for a substantial workload of managing contracts and payroll.
Though the law was aimed at Uber and Lift, some groups like doctors, lawyers, accountants, brokers and builders were exempted. But not musicians and writers, for examples.
Companies Fighting Back
Meanwhile, the targeted companies are fighting the law tooth and nail. Using California’s ballot initiative procedure, they are spending more than $100 million to convince voters to repeal the law. They are also trying to tweak their business plans to allow them to claim they don’t meet the three tests of the law. The tests: that workers perform tasks under the company’s control; that their work is integral; and the workers are not running independent enterprises.
In New York, of course, no one really knows how many people earn a living from the gig economy.
It is not just culture workers. Babysitters, consultants, home health aides, personal shoppers and oodles of other people work outside traditional venues.
Critics also include those with more partisan outlooks.
The conservative-leaning Daily Signal notes that while Cuomo is aiming to prevent sweatshops, the gig economy and contract-based work is usually voluntary and desirable to those who choose it. If one considers true independent work in which individuals choose their tasks, how long they work and how much latitude exists, it hardly sounds exploitative.
In California, the law has come with elimination of work for contract writers, for example, who will never be hired by publications as full- or even part-time workers with associated benefits and assignments.
According to the Bureau of Labor Statistics, “Fewer than 1 in 10 independent contractors would prefer a traditional work arrangement.” And the average Uber driver wouldn’t work at all if they had to commit to a traditional taxicab employment arrangement.
There are many reasons and situations that lead people to prefer independent status. Single parents may want more flexibility and autonomy. Students or those needing more money who need income to live on while studying or working another job. Older and semi-retired individuals who want to keep a foot in the workforce. Disabled individuals or those with mental illnesses, may want to work some days, but not others. Stay-at-home parents may want to work without set hours. Innovators may need income to support entrepreneurial pursuits.
If arguments over proposed solutions sound complicated, it is usually because they are. One person’s protection is another’s job loss in this matter.
There have to be thoughtful ways to keep from creating new problems in solving a current one.