Massachusetts is the latest battleground in the fight over whether ridehail and delivery drivers for Uber, Lyft, DoorDash, and the like are employees or independent contractors.
The Commonwealth just wrapped up its trial against Uber and Lyft for misclassifying their workers as independent contractors and illegally denying them employment rights. A decision is expected in the coming weeks.
Meanwhile, the companies are trying to nullify any potential loss by legalizing their rights-stripping models via a costly ballot initiative that will go before Massachusetts voters in November.
The stakes are high
Employees in Massachusetts, as elsewhere, enjoy rights and protections that independent contractors—individuals in business for themselves—do not.
Massachusetts employees are guaranteed at least a $15 minimum wage for all time worked and overtime pay after 40 hours. They are also entitled to other benefits and protections, including retaliation protections, unemployment insurance, and workers’ compensation, to name just a few.
That’s a lot to lose.
And one look at California provides a chilling preview of what a loss would mean for workers.
In California, the companies duped voters into passing a ballot measure, Prop 22, enshrining drivers as independent contractors under state law. The result: drivers now earn less than $6 an hour after accounting for expenses and non-driving wait times. And the “benefits” the companies promised are little more than a mirage. Prop 22 “undermine[d] the pay, benefits, and autonomy of millions of California workers and families.”
‘I definitely feel deceived,’ said Lindsey Schaffran, 27, of Modesto, who voted in favor of Proposition 22. ‘We all felt that Prop 22 was going to help the drivers, and Uber and Lyft were going to be paying them more, when really they’re just trying to save their own pockets.’
Source: Washington Post, “Uber and Lyft used sneaky tactics to avoid making drivers employees in California, voters say. Now, they’re going national.” (Nov. 17, 2020) Link: https://www.washingtonpost.com/technology/2020/11/17/uber-lyft-prop22-misinformation/
Good businesses and social programs suffer too
It’s not only workers who lose. State social insurance programs—programs that provide a lifeline to workers and boost the economy—are deprived of critical contributions when businesses cheat.
Indeed, the Massachusetts State Auditor revealed that Uber and Lyft’s refusal to recognize their workers as employees means they pocketed, instead of contributed, at least $47 million in workers’ compensation, unemployment insurance, and paid family and medical leave payments in 2023 alone.
And law-abiding businesses suffer too because the model enables corporations to “freeload off of payments that other employers make”—subjecting businesses statewide to unfair competition. Uber, Lyft and others are demanding nothing short of a “permanent competitive advantage” over businesses that comply.
Corporate push to ‘gigify’ work threatens good jobs everywhere
Massachusetts is the latest battleground, but it won’t be the last. Corporations like Uber and Lyft are following their playbook to legalize their misclassification model nationwide.
And the threat is spreading as corporations outside ridehail and delivery, including healthcare, warehousing, and hospitality, seek to follow suit.
Equally disturbing, corporate behemoths such as Amazon, Walmart, Target, and Google have allied themselves with Uber and others to form a federal coalition—the Coalition for Workforce Innovation (CWI) —that promotes national policies to call workers independent contractors or non-employees who lack basic employment or labor protections.
As NELP has previously cautioned: “Under the guise of ‘innovation’ and ‘flexibility,’ the CWI threatens to preserve and expand exclusions in the federal labor code, deplete social insurance systems, and cement class, race, and gender inequality in the U.S.”
Workers and allies are fighting back
Workers across the country are fighting these corporate-backed, work-degrading policies.
Drivers impacted by Prop 22 in California publicized its negative impacts and continue to demand robust rights. And Prop 22’s constitutionality is being challenged. Meanwhile, the Dignity for Drivers campaign would add ridehail-specific regulations to the employment protections drivers will receive if the challenge to Prop 22 succeeds.
Voters in Massachusetts unsuccessfully challenged the corporate ballot measures, but allies will continue to raise awareness of California’s experience as they continue to seek accountability. And a coalition backed by SEIU 32BJ will have its own ballot initiative to allow drivers to unionize and bargain collectively.
Meanwhile, worker-led groups around the country are winning policies to improve pay and working conditions for misclassified app-based delivery and ridehail workers.
And policymakers in other states are renewing broad commitments to ending the misclassification of employees as independent contractors.
In Pennsylvania, after a state task force found that more than a quarter million workers in the state were misclassified, lawmakers introduced a new Workplace Misclassification bill to more effectively protect employees and increase enforcement. In Maryland, the governor issued an executive order to re-launch that state’s misclassification task force, which is conducting outreach to make recommendations on strengthening Maryland’s law.
Some government enforcers are doing their part too. The San Francisco City Attorney’s Worker Protection Team sued the hospitality platform Qwick for misclassification and reached a settlement in February requiring the company to reclassify its workers as employees and pay $2.1 million. Just this month, the office also sued WorkWhile, a platform temp staffing business, for illegally misclassifying its workers and denying them employment rights and benefits. Denver Labor also determined that Instawork and Gigpro misclassified their employees and required the companies to pay $280,000 in restitution to their workers and $800,000 in penalties. And of course, the Massachusetts’ Attorney General just finished its trial against the companies.
Robust rights and protections are the foundation of good jobs
The stakes are high, and the risks are real. Workers, voters, policymakers, and allies must understand and fight corporate campaigns to legalize the “gigification” of work—and come together to ensure the robust workplace rights and protections necessary to foster a good-jobs economy. Workers, their families, and communities deserve nothing less.
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