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COVID-19

California court to rule on gig worker classification

Meghan McCarty Carino Aug 5, 2020
Heard on: Marketplace
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A driver takes part in a caravan protest against Uber and Lyft in Los Angeles. For many ride-share drivers, unemployment insurance and other benefits are major issues. Mario Tama/Getty Images
COVID-19

California court to rule on gig worker classification

Meghan McCarty Carino Aug 5, 2020
A driver takes part in a caravan protest against Uber and Lyft in Los Angeles. For many ride-share drivers, unemployment insurance and other benefits are major issues. Mario Tama/Getty Images
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A California court is expected to hand down a big ruling Thursday about how gig workers are classified.

The state attorney general and the city attorneys of Los Angeles, San Francisco and San Diego have asked for an injunction that would force Uber and Lyft to immediately reclassify their drivers as employees, rather than independent contractors. And which side of that line the workers fall on has taken on added significance during the pandemic.

It’s all about the safety net. Traditional full-time employees — for the most part — have one to fall back on. Independent contractors like gig workers? Not so much.

“The option is between working or losing the roof over my head,” said Edan Alva, a Lyft driver who lives outside San Francisco. He got sick in January with what he thinks was the regular flu. 

“And since I don’t get sick days, there is no way for me to stop working,” Alva said. “So I was working while having the symptoms, which I hate myself for doing it. It’s dumb.”

Paid leave, subsidized health insurance, unemployment benefits — they’ve all become crucial during the pandemic. They’re also usually paid for by companies. New emergency laws like the federal CARES Act have provided some of these benefits to workers who aren’t full-time employees.

“But I think it’s just revealed how many holes we have for too many people in our economy in general,” said David Weil, a professor at Brandeis University. He’s the author of “The Fissured Workplace,” about how the traditional work model the country’s safety net was built on has been breaking down.

That leaves some workers without benefits and the government with fewer resources to respond to emergencies.

Because gig platforms like Uber and Lyft don’t pay into unemployment insurance like regular employers, the federal government is now shouldering the cost of providing relief to gig workers who’ve been sidelined by the pandemic. And state unemployment trust funds are quickly running out of money.

COVID-19 Economy FAQs

What does the unemployment picture look like?

It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.

Will it work to fine people who refuse to wear a mask?

Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.

How are restaurants recovering?

Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.

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