After Prop 22, New York is still split on gig worker reforms

Many legislative issues have languished in Albany over the past year, pushed to the side to deal with the immediate concerns of the coronavirus pandemic, and the fate of gig workers is one of them. But while some labor groups hope to see workers such as Uber drivers and Postmates delivery cyclists finally granted employment benefits like overtime or guaranteed paid sick leave this session, there’s little agreement about the best way to do that. Now, the results of a heated and expensive fight over this same question in California last year could complicate the debate in New York.

In November, California voters passed Proposition 22, a ballot measure that exempted app-based workers for companies such as Uber, Lyft and Doordash from a new law – known as AB5 – that would have reclassified those workers as employees rather than independent contractors. The result was a stunning rebuke of labor’s efforts to force those companies to treat their workers as employees – made to pay for health care and other benefits – and a decisive victory for gig companies, powered by their more than $200 million investment campaigning in support of the measure. 

The story was simple: California tried to reclassify gig workers as employees and failed. As Albany mulls various proposals to grant its own gig workers more benefits, labor experts said that story is a warning to some in the labor movement that similar efforts to reclassify gig workers as employees in New York will face an uphill battle. “That sent a very strong signal to all advocates that the policy solution would have to be much more strategic,” said Maria Figueroa, Director of Labor and Policy Research at the Worker Institute at Cornell University’s School of Industrial and Labor Relations. “I really doubt that the policy advocacy community will support an AB5-like deal in New York state, given what happened in California.”

But while some lawmakers craft alternative proposals and some labor leaders prepare to come to the negotiating table with gig companies – which tend to favor portable benefits packages over reclassification – others remain steadfast in their support of treating app-based drivers and on-demand task do-ers as employees. It’s never been so clear how essential gig workers are – especially during the pandemic – but in the wake of California’s Prop 22, there’s still little consensus on how New York should grant these workers more benefits. “I think it would be almost foolish for the labor movement to compromise, when the political tide across the country is shifting,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, which represents drivers for apps such as Uber and Lyft. 

Desai’s organization is part of a coalition advocating for New York to adopt something similar to California’s now gutted AB5 law, which uses an employee classification known as the “ABC test.” Under the test, a worker is only classified as an independent contractor if they are (1) free from the control of their employer, (2) doing work outside the usual course of business of an employer and (3) engaged in an independently established business. Under this definition, app-based drivers and many others would be classified as employees. 

State Sen. Robert Jackson and Assembly Member Deborah Glick introduced a bill in 2019 that would apply this ABC test to independent contractors in New York. But Jackson suggested his focus is as much – if not more – on people such as nail salon workers, home health aides and other kinds of workers who make up a greater share of the so-called gig economy than the people often front-and-center in this debate: app-based gig workers like ride-hail drivers. “I just want to make sure that people are treated as employees if they are employees,” Jackson told City & State. 

Desai said that the ABC test is still the best way forward for New York, even though it didn’t succeed in California. New York already has a handful of court rulings that require Uber, Lyft and Postmates workers to be treated as employees for the purposes of unemployment insurance. And legislation proposed by the New York City Council would treat these workers as employees for the purposes of paid sick leave – another benefit independent contractors don’t typically have access to.

But others in the labor movement say they’re not set on the ABC test. Mario Cilento, president of the New York State AFL-CIO, said that he wants to see app-based workers receive all of the protections that employees are entitled to, including minimum wage, overtime, workers compensation, unemployment insurance, harassment protections and the right to organize. But he said the ABC test isn’t the only way to get there. “There are different ways to go about it,” Cilento said. “We are more than willing to talk and work with everyone, including the companies, to get to a conclusion here,” he added, referring to the app-based companies.

Some lawmakers and labor leaders deny that California’s rebuke of the ABC test has any bearing on what happens in New York. State Sen. Diane Savino, who has been working on gig worker legislation in Albany for a few years now, has said for a while that California’s approach of reclassifying gig workers as employees wasn’t necessarily one that New York should follow. “I was always critical of California’s approach. It was too wide of a net, which is why it was impossible to ever implement,” she told City & State this week. “It led to countless litigation and a never-ending number of exemptions.”

A coalition of tech companies, business organizations and other groups have lined up against the ABC test approach in New York as well. While most members of the New York for Coalition for Independent Work are unsurprising – tech companies like Uber, Lyft and Instacart make the headlines – some civil rights organizations also oppose reforms that would reclassify all gig workers. Rev. Kirsten John Foy, president of the Arc of Justice Foundation and a member of the coalition, said that gig work of all kinds has provided opportunities for people of color, who have historically been marginalized and discriminated against in the traditional employer-employee model. “While we do need to recognize the impact that the pandemic has had on independent contractors, we should not bind and constrict them to the traditional benefits and the traditional framework of employment,” Foy said. “They should have expanded protection, but as small business owners, and not as employees.” Others have raised concerns that reclassifying gig workers as employees would pose problems for undocumented workers.

While Savino said she is working on new gig worker legislation that could be forthcoming in the next month, she was mum on what exactly it would contain. Companies like Uber and Lyft have proposed a portable benefits approach in the past, which involves companies paying into benefit funds that travel with workers from job to job. Its likely labor will also continue to push for collective bargaining rights, however.

A statistic that hasn’t adequately been captured yet is how gig workers at large feel about their classification status. The gig companies who fought against AB5 in California cite informal polling – and “independent studies” sometimes funded by the companies themselves – showing that the majority of gig workers wanted to remain independent contractors despite labor’s attempts to have them reclassified. Some gig workers, however, see reclassification as the best way to guarantee labor protections. “Drivers have to be treated as employees, because we have no protections,” said Doh Seydou Ouattara, a driver who has worked for Uber and Lyft. 

If New York were to pass legislation that reclassified gig workers as employees, it’s safe to say gig companies would put up a strong – and well-funded – fight. Though New Yorkers don’t have the ability to start statewide ballot initiatives in the way that Californians do, the Coalition for Independent Work for New York will be a formidable force as Albany resumes the debate on gig worker reforms, which may be why some labor groups are open to compromise. After all, some of these tech companies have a long history of resisting and lobbying against New York’s attempts to regulate their industries. “The companies have resources, they’re organized, they collaborate,” Figueroa said. “The labor side doesn’t have as many resources, it’s not organized, they don’t come up with a unified agenda on this issue.”

Of course, with momentum growing behind the push to reform gig work in some way, it’s also clear to the companies that their current model of offering their workers little or no benefits won’t stick around for long either. They’ll have to show up at the negotiating table too. “I negotiate in the Legislature the same way I did when I was in the labor movement,” Savino said. “You’re either at the table or you’re on the menu. So take your pick.”