Wall Street Journal Editorial:
May 6
Even during a pandemic, California Democrats have unions to look after. See Attorney General Xavier Becerra’s lawsuit Tuesday against Uber and Lyft for allegedly misclassifying drivers as independent contractors.
The state’s blunderbuss law AB5 that Democrats passed last year sought to force businesses to reclassify independent contractors—from truckers to newspaper deliverers—as employees. As employees they could be organized more easily by unions. While their main target was so-called gig economy companies like Uber and Lyft, damage has been far and wide.
Uber and Lyft have refused to reclassify drivers who would then lose their ability to control their hours. But they have let drivers turn down more trips. They are also backing a voter referendum in November that would override AB5 for app-based companies while guaranteeing that workers receive auto insurance, 120% of the minimum wage plus 30 cents per mile for vehicle expenses and a contribution to a health plan on the state ObamaCare exchange.
This isn’t enough for Mr. Becerra and City Attorneys in San Diego, San Francisco and Los Angeles, who allege in the lawsuit that the companies have unlawfully deprived workers of their right to the minimum wage, overtime, paid sick leave, disability insurance and unemployment insurance. They want the companies to pay $2,500 per alleged violation—to their governments.
“Sometimes it takes a pandemic to shake us into realizing what that really means and who suffers the consequences. Uber and Lyft drivers who contract the coronavirus or lose their job quickly realize what they’re missing,” Mr. Becerra declared.
Yet the lawsuit actually creates a catch 22 that could prevent drivers from receiving unemployment benefits if they lose income amid the pandemic. Congress in the $2.2 trillion Cares Act created a Pandemic Unemployment Assistance program for independent contractors, which the Labor Department clarified last month includes gig workers.
But now drivers could be deemed ineligible to collect benefits from this program because the state says they are employees. At the same time they can’t collect traditional state unemployment benefits because Uber and Lyft argue they are contractors and didn’t make payments into the state’s unemployment fund.
When asked about this hitch during a press conference, LA City Attorney Mike Feuer said drivers could receive restitution for missed unemployment compensation after a court renders a decision. That’s nice. Meantime, the gig workers are in a jam.
Disclaimer: Articles featured on Oregon Report are the creation, responsibility and opinion of the authoring individual or organization which is featured at the top of every article.