Press Release: Raising the Floor for Workers in the Gig Economy

Press Release: Raising the Floor for Workers in the Gig Economy

New report highlights innovative policies the New York City Council can adopt to strengthen rights, protections, and benefits for gig workers

City Hall, NY -- For Labor Day 2016, New York City Council Member Brad Lander released a new policy report identifying challenges facing workers in the gig economy, and outlining concrete steps that New York City can take to protect gig workers from wage theft and discrimination, as well as longer term efforts to offer portable benefits and a framework for worker organizing.

Since 2005, the “gig economy” has grown dramatically, as companies have sought to shed costs and employer responsibilities. From 2005 to 2015, the number of workers engaged in “alternative work arrangements” (independent contractors, freelancers, temps, on-call, and contract workers) grew by 9.4 million, while the number of traditional employees declined slightly. From graphic designers, to models, to temps, to for-hire drivers, studies show that between 16% and 40% of all workers earn their checks “by the gig” rather than by a traditional hourly or weekly wage. There are an estimated 1.3 million freelance workers in NYC alone.

While these arrangements can bring flexibility, convenience, and lower prices, it is too often workers who bear the cost. Typically classified as independent contractors, gig economy workers lack the rights, protections, and benefits of traditional employees, making it far more difficult to piece together a decent standard of living. More than 70% of freelancers report that they have been victims of wage theft or late payment. Others face discrimination with little recourse. And the IRS estimates that millions of workers have been misclassified as independent contractors when they are truly employees, and thus denied health benefits, retirement security, or paid leave.

The new report, Raising the Floor for Workers in the Gig Economy: Tools for New York City and Beyond explores some of the key challenges faced by gig workers and outlines policy changes currently under consideration at the New York City Council. The policies provide an opportunity to modernize labor laws for a 21st century economy, even in the face of partisan gridlock at the state and national level.

The report builds on a City Council hearing in February 2016 and highlights the stories of gig workers:

  • Freelance film producer Elizabeth MacKenzie was stiffed out of $2,500 she was owed by a client. She couldn’t cover utilities or rent, so her power got turned off, and she lived on rolls and water.
  • Mauricio Niebla and his colleagues worked for months on a new elementary school reading program. Although publishing giant Houghton Harcourt Mifflin paid their employer, Inkwell Publishing, more than $300,000 for the work they had done, Mauricio and his team never saw a cent.
  • When Kimberly Brown was denied work by distributor Craftmatic after objecting to a racial slur, her case was dismissed because -- as an independent contractor -- she was not legally protected from discrimination.

“In the last ten years, our economy has changed significantly, but our labor, employment, and discrimination laws have failed to keep up,” said New York City Council Member Brad Lander. “Workers like Elizabeth MacKenzie, Mauricio Niebla, and Kimberly Brown are paying the price. Gig economy workers lack the rights, protections, and benefits they deserve. New York City can take the lead in raising the floor for gig economy workers. This Labor Day, let’s make sure that workers know that their labor will be respected and protected, whether they are paid by the week, by the hour, or by the gig.”

Informed by key stakeholders and best practices from cities around the country, the report presents a slate of policy tools that New York City Council can adopt to establish basic protections and rights for gig workers. These tools include:

  • Protecting independent workers from wage theft through the “Freelance Isn’t Free Act” (Intro 1017-A) -- the first legislation of its kind in country, developed in partnership with Freelancers Union -- which provides a right to full and timely payment, along with new tools for enforcement. 
  • Amending the NYC Human Rights law to clarify that its employment protections apply to protect independent and contingent workers from discrimination (Intro 1016).
  • Establishing a “portable benefits fund” for drivers (yellow-taxi, Uber, and others). Council Member Corey Johnson will introduce a bill this month to authorize the TLC to establish such a fund, paid for with a modest per-ride surcharge, to provide health and other benefits to drivers. The fund could serve as a model for other sectors as well.
  • Advancing new frameworks (without undermining existing ones) to provide gig workers with the ability to organize, elect their own representatives, and bargain collectively.

“Regardless of the nature of their employment, workers in our City and throughout the country deserve the same basic standards of fairness,” said Council Member Corey Johnson. “In today’s economy, we need to realize that there are many kinds of work situations, and that all employees should enjoy the right to timely payment, benefits and the ability to organize. The policy prescriptions in this report would go a long way to ensure these rights for millions of Americans, and I’m proud to be working with Council Member Brad Lander on these crucial labor rights causes.”

"Nearly one in three working Americans are independent laborers who deserve the same dignity and respect afforded to traditional employees," said Council Member Stephen Levin. "As this report clearly outlines, it's essential that New York City continues to be a leader in the fight for workers' justice through passage of bills like the Freelance Isn't Free Act as well as support for commonsense benefits and financial protections for the gig economy."

“Independent workers are one of the fastest growing sectors of the workforce and the backbone of the US economy. Despite making up more than one-third of the American workforce, freelancers don’t have access to the essential benefits and protections that come with traditional employment,” said Freelancers Union’s Founder and Executive Director Sara Horowitz. “We need to update our laws to protect the 53 million Americans who are working in new ways.”

“Council Member Lander is a leader nationally in efforts to ensure that workers don’t lose rights and protections simply because of the structures that business imposes on them. This paper includes strong, common-sense ways to secure those rights and protections,” said Rebecca Smith, Deputy Director at the National Employment Law Project.

"At a time when Wall Street backed corporations engaged in misclassification are setting off a race to the bottom across all sectors and putting drivers' generations-old profession under threat of "gigification", a portable benefits fund like the one first developed by the New York Taxi Workers Alliance in 2012 is a first step toward improving drivers' quality of life, regardless of whether they have been found to be independent contractors under the law and without a pass for companies whose misclassification is being challenged. Taxi, green cab, livery and black car drivers, including those dispatched by Uber, Lyft and other App-based car services, deserve access to benefits. We applaud steps taken to protect workers by expanding labor protections without undermining existing laws" said Bhairavi Desai, Executive Director of the 19,000-member New York Taxi Workers Alliance.

Irene Jor, New York Organizer at the National Domestic Workers Alliance said, "Raising the Floor for Workers in the Gig Economy comes at a critical moment when technological change and cultural shifts call for new labor frameworks that meet the needs of today's workers. At the National Domestic Workers Alliance, we recognize the overlap between domestic work and the on-demand economy, and believe the recommendations laid out by this report, if legislated and implemented, would have an echoing impact on our sector now and as it continues to transform. Every gig economy worker, regardless of profession, should have the right to labor and discrimination protections that honor their work and humanity."

"The growth of the gig economy reflects the most recent strategy by big corporations to shift risk and uncertainty to workers without meeting basic employment standards, leaving working families struggling to make ends meet. This report shows that wage theft from freelancers, the part-timing of retail jobs, and the insecurity of Uber and Lyft drivers are related facets of a fissured economy that hurts New York City residents. CPD applauds Councilmember Lander and the New York City Council for crafting innovative policy solutions to these challenges - and especially for highlighting the importance of protecting workers' right to organize to demand fair treatment,” said Rachel Deutsch, Senior Staff Attorney for Worker Justice at Center for Popular Democracy.

“Raising employment standards for workers in today’s economy is critical to combating rising inequality as well as pushing back against occupational and economic segregation for disadvantaged workers. Gig economy workers, like all workers, want the stability and security of earning enough to thrive. With targeted interventions like the innovative organizing and policy ideas outlined in this report, we can make sure that the rules of the economy benefit everyone,” said Derecka Mehrens, Executive Director at Working Partnerships USA.

"Councilman Lander understands the complexities of the on-demand economy. Lander looks beyond the façades of quick consumers conveniences by analyzing the consequences that this economy will have for our children, their children and their children's children into the future.

Lander does not only reveal how policymakers could support or regulate the on-demand economy on a local level, he also proposes to invest in alternatives, a step that will be necessary to achieve a digital economy that is not solely dictated by monopolistic interests,” said Trebor Scholz, Associate Professor Culture and Media, The New School.

"A Better Balance applauds Councilmember Brad Lander and Annie Levers for an incredibly useful report on a growing segment of the workforce that has been left out of the protections we know all workers deserve.  Shining a light on the problem and prescribing solutions is a great step toward insuring that contingent workers are treated fairly in New York City and making New York a model for the nation," said Sherry Leiwant, Co-President of A Better Balance.

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