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COVID & Unemployment

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 & Unemployment

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 are the details of President Joe Biden’s coronavirus relief plan?

The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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