By Robert
Reich
GM is worth around $60 billion, and has over 200,000employees.
Its front-line workers earn from $19 to $28.50 an hour, with benefits.
Uber is estimated to be worth some $40 billion, and has 850 employees. Uber also has over 163,000 drivers (as of December – the number is expected
to double by June), who average $17 an hour in Los Angeles and Washington, D.C.,
and $23 an hourin San Francisco and New York.
But Uber doesn’t count these drivers as employees. Uber says
they’re “independent contractors.”
What difference does it make?
For another, GM’s employees get all the nation’s labor protections.
These include Social Security, a 40-hour workweek with
time-and-a-half for overtime, worker health and safety, worker’s compensation
if injured on the job, family and medical leave, minimum wage, pension
protection, unemployment insurance, protection against racial or gender
discrimination, and the right to bargain collectively.
Not to forget Obamacare’s mandate of employer-provided
healthcare.
Uber workers don’t get any of these things. They’re outside the
labor laws.
Uber workers aren’t alone. There are millions like just them,
also outside the labor laws — and their ranks are growing. Most aren’t even
part of the new Uberized “sharing” economy.
They’re franchisees, consultants, and free lancers.
They’re also construction workers, restaurant workers, truck
drivers, office technicians, even workers in hair salons.
What they all have in common is they’re not considered
“employees” of the companies they work for. They’re “independent contractors” –
which puts all of them outside the labor laws, too.
The rise of “independent contractors” Is the most significant
legal trend in the American workforce – contributing directly to low pay,
irregular hours, and job insecurity.
What makes them “independent contractors” is the mainly that the
companies they work for say they are. So those companies don’t have to pick up
the costs of having full-time employees.
But are they really “independent”? Companies can manipulate
their hours and expenses to make them seem so.
It’s become a race to the bottom. Once one business cuts costs
by making its workers “independent contractors,” every other business in that
industry has to do the same – or face shrinking profits and a dwindling share
of the market.
Some workers prefer to be independent contractors because that
way they get paid in cash. Or they like deciding what hours they’ll work.
Mostly, though, they take these jobs because they can’t find
better ones. And as the race to the bottom accelerates, they have fewer and
fewer alternatives.
Fortunately, there are laws against this. Unfortunately, the
laws are way too vague and not well-enforced.
For example, FedEx calls its drivers independent contractors.
Yet FedEx requires them to pay for the FedEx-branded trucks they
drive, as well as the FedEx uniforms they wear, and FedEx scanners they use –
along with insurance, fuel, tires, oil changes, meals on the road, maintenance,
and workers compensation insurance.
If they get sick or need a vacation, they
have to hire their own replacements. They’re even required to groom themselves
according to FedEx standards.
FedEx doesn’t tell its drivers what hours to work, but it tells
them what packages to deliver and organizes their workloads to ensure they work
between 9.5 and 11 hours every working day.
If this isn’t “employment,” I don’t know what the word means.
In 2005, thousands of FedEx drivers in California sued the
company, alleging they were in fact employees and that FedEx owed them the
money they shelled out, as well as wages for all the overtime work they put in.
Last summer, a federal appeals court agreed, finding that under California law – which looks
at whether a company “controls” how a job is done along with a variety of other
criteria to determine the real employment relationship – the FedEx drivers were
indeed employees, not independent contractors.
Does that mean Uber drivers in California are also “employees”?
That case is being considered right now.
What about FedEx drivers and Uber drivers in other states? Other
truck drivers? Construction workers? Hair salon workers? The list goes
on.
The law is still up in the air. Which means the race to the
bottom is still on.
It’s absurd to wait for the courts to decide all this
case-by-case. We need a simpler test for determining who’s an employer and
employee.
I suggest this one: Any corporation that accounts for at least
80 percent or more of the pay someone gets, or receives from that worker at
least 20 percent of his or her earnings, should be presumed to be that person’s
“employer.”
Congress doesn’t have to pass a new law to make this the test of
employment. Federal agencies such as the Labor Department and the IRS have the
power to do this on their own, through their rule making authority.
They should do so. Now.
ROBERT B. REICH, Chancellor’s Professor of
Public Policy at the University of California at Berkeley and Senior Fellow at
the Blum Center for Developing Economies, was Secretary of Labor in the Clinton
administration. Time Magazine named him one of the ten most effective cabinet
secretaries of the twentieth century. He has written thirteen books, including
the best sellers “Aftershock" and “The Work of Nations." His latest,
"Beyond Outrage," is now out in paperback. He is also a founding
editor of the American Prospect magazine and chairman of Common Cause. His new
film, "Inequality for All," is now available on Netflix, iTunes, DVD,
and On Demand.
