The 1099 Self-Organizing Act applies to businesses and workers who participate in what’s sometimes called the “gig economy” or the “sharing economy,” where companies use independent contractors to operate their service.
(TNS) -- Gig workers such as Uber and Lyft drivers would gain the right to collectively bargain for benefits and wages under legislation introduced in California on Wednesday.
The bill, authored by Assemblywoman Lorena Gonzalez, D-San Diego, seeks to amend state labor law and allow 10 or more independent contractors, who work for “hosting platforms” such as Uber and Lyft, to join in union-like groups and negotiate workplace protections.
Called the 1099 Self-Organizing Act, the legislation applies to businesses and workers who participate in what’s sometimes called the “gig economy” or the “on-demand economy,” where companies use online systems and mobile apps to match laborers with customers.
Gig workers include Uber or Lyft drivers, DoorDash or Postmates food delivery drivers, Handy house cleaners and Amazon “flex” workers who deliver packages. They are technically independent contractors who set their own terms of employment — taking as many or as few jobs as they want — but they have no control over wages, which can be changed at a whim by the companies in charge.
Gonzalez believes there’s a gap in labor law that leaves these workers with few safeguards. Though her bill doesn’t mandate terms, it would provide independent-contractor groups with some bargaining muscle to potentially secure better wages or insurance.
“Obviously our economy is changing,” Gonzalez said. “We think it’s time that our labor laws catch up with that reality.”
She estimates that there are 1 million to 2 million gig workers in California, or roughly 10 percent of the state’s workforce.
“It’s really a free market approach to an innovative economy,” Gonzalez said of her bill. “We can start to regulate this activity. ... But as a former regulator, I just think it’s better to allow the workers and the employers to get together and negotiate something that works for both of them.”
Opponents, however, argue that the legislation, in requiring bargaining collectives, undercuts the definition of independent contractor. In granting more power to workers, the bill could also stifle the growth of on-demand companies, which would have to change the way they do business.
“Individuals are now able, like never before, to work for themselves and earn money how, when, and where they want,” said Michael Beckerman, CEO and president of the Internet Association, which represents the interests of Uber, Lyft and other Internet-based companies. “Independent contractors are prevalent in every industry, but this proposal unfairly targets the Internet sector in a way that could hurt the very people it purports to help.”
The 1099 Self-Organizing Act, however, applies to people not just working for tech companies. The legislation would allow a seemingly broad spectrum of independent contractors to unionize, and not in the kind of unions familiar to most Americans.
Currently, U.S. federal labor law only grants the collective bargaining privilege to workers who are classified as employees. And it only compels employers to bargain with an employee group if a majority of the workers in a workplace want to be represented by that union.
“It is a dramatic departure from traditional labor law,” said Seth Harris, a distinguished scholar at Cornell University’s School of Industrial and Labor Relations, and the former deputy secretary of the U.S. Department of Labor.
“(The 1099 Self-Organizing Act) would create what some people call a ‘members-only’ or ‘minority’ union bargaining relationship wherein the workers don’t have to get a majority of all of the workers in the workplace to agree to join the union. Instead you just need to get 10 or more people working for the online gig economy company to say they want to bargain together with the employer. And that’s enough. That does not exist in U.S. federal, private sector labor law.”
The California bill seeks to level the playing field between workers and employers — but it does not seek to classify gig workers as employees.
Rather, the 1099 Self-Organizing Act creates a hybrid breed of worker who is granted some of the legal protections afforded to employees, said Dan Eaton, a business ethics lecturer at San Diego State University and an employment lawyer.
“This is an effort to shift the power here,” he said. “The measure is designed to make it easier for independent contractors in the gig economy to bargain for more in the way of pay, in the way of benefits and to give them greater leverage.”
Uber and Lyft driver Kevin McGraham, 39, of Mission Valley views the bill as a positive development for drivers. The San Diegan began working to establish a local drivers’ association after the ride-hail companies slashed their fares in January, which negatively impacted drivers’ per-ride earnings by around 30 percent.
Thus far, McGraham says he’s recruited more than 240 people to join a Facebook group.
“The highest thing on all of our priority lists is negotiating pay,” he said. “I think being able to collectively bargain with companies like Uber would help the independent contractors have job security and income security.”
Still, the 1099-bill-to-state-law process could take years.
In order for Gonzalez’s bill to become law, it will first go through various committee hearings — likely starting with the labor committee and then moving to the appropriations committee. Then, it would need simple-majority approval, first in the Assembly, and second in state Senate. Finally, the 1099 Self-Organizing would need to be signed into law by California’s governor.
And, even if signed into law, the bill will likely face court challenges contesting its legality.
Last week, the U.S. Chamber of Commerce filed suit against the city of Seattle, which recently granted independent drivers for Uber, Lyft and taxis the right to unionize. The suit alleges that the Seattle ordinance is illegal and violates federal anti-trust and labor law.
Whether labor changes are enacted sooner or later, Gonzalez believes some type of remedy for independent contractors is inevitable.
“We live in a society of rules. We have this Wild West economy right now that is being conducted with very few or no rules,” she said. “That's not fit for the state. It’s not fit for the workers, and ultimately not fit for our country.”
©2016 The San Diego Union-Tribune Distributed by Tribune Content Agency, LLC.