Gonzalez Bill Opens the Door for Rights of Gig Economy Workers

By Doug Porter

Assemblywoman Lorena Gonzalez has (re-)introduced legislation (AB 1727) ensuring that independent contractors working in the gig economy are allowed workplace rights currently enjoyed by conventional employees.

Thus begins what will likely be a multi-year struggle to redefine the role of labor in the 21st century.

The rights under consideration include negotiating as a group, communicating with customers and the public, boycotting or critiquing a hosting platform’s business practices, and reporting publicly or to law enforcement any practices in violation of local, state, or federal laws.

The 1099 Self-Organizing Act, as it’s called, would apply to businesses and workers in the “gig economy,” where companies use online systems and mobile apps to match laborers with customers. State labor law would be amended, allowing 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.

These “on-demand” businesses utilize roughly 10% of the workforce in California, according to Gonzalez. Depending on who’s doing the surveying, this amounts to 1 to 2 million people.

The San Diego Democrat cites polling among those working in the gig economy agreeing by a 2-1 margin that the industry is exploiting a lack of regulation. This article from Quartz breaks down how the “on-demand” economy fails workers and the need to rebuild and rethink the social compact of the 20th century.

Rather than reclassifying gig workers as employees, the 1099 Self-Organizing Act allows for a hybrid workforce description, granting some of the legal protections afforded to employees, while acknowledging the differences in the employers’ business models.

While it’s the internet business groups that are poo-pooing the intent of the proposed legislation, it would apply to a broad spectrum of independent contractors working in a variety of industries.

From the Union-Tribune:

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.”

Politico interviewed Sacramento political consultant Richie Ross, a co-sponsor of the legislation:

Some are fighting in companies like Uber to be recognized as employees, and those legal fights could go on for years, he said. Meanwhile, such employees are not currently covered by federal labor law, and are in danger of violating antitrust laws if they organize, Ross said.

Under the proposal, “gig” workers will be allowed to get together and form local associations, essentially bypassing the formal step of forming unions.

They’ll “get the right to negotiate items like fees, what they’re allowed to charge … the right to negotiate insurance,’’ and to get legal protection within their own group, Ross said.

“All we’re doing here is creating a legal platform that gives people rights to negotiate, and imposes a requirement for the platform to negotiate with them in good faith, and then gives these associations the right to go to court when the law is violated,’’ said Ross.

Organized labor is wary of this approach, according to an article at Capital & Main:

AB 1727 would not, however, compel employers to classify independent contractors as employees — nor would it allow these workers to form a traditional labor union or to join an existing union. That rubs Steve Smith, director of communications for the California Labor Federation, the wrong way.

“We agree with Assemblywoman Gonzalez that self-employed workers should have every right to bargain collectively, but have concerns about the approach,” Smith told Capital & Main by phone, “The problem with AB 1727 is that it basically enshrines an unfair business model that companies like Uber use to misclassify their workforce as independent contractors instead of employees.” (Disclosure: Smith is a member of Capital & Main’s editorial board.)

This glass of labor reform is half-full, not half-empty, according to another union leader.

“It’s a debate that must begin,” said Rusty Hicks, executive secretary-treasurer of the Los Angeles County Federation of Labor, in an email. “And this proposal will certainly get that started.”

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This is an excerpt from Doug Porter’s column at our associates at San Diego Free Press.