Temporary Workers Not Allowed to Form Unions

Seth Sandronsky
Self-employed independent contractors in California can neither form unions nor negotiate collective bargaining pacts, but part of those conditions could soon change, according to Assemblywoman Lorena Gonzalez (D-San Diego). Gonzalez, Chair of the Assembly Select Committee on Women in the Workplace, introduced Assembly Bill 1727 on January 28 as an amendment to the state’s Labor Code. Gonzalez’s bill, which will be updated today, is called the California 1099 Self-Organizing Act. It would allow independent contractors to form employee associations that could negotiate working conditions and pay, though not to form labor unions.
“All workers should have the right to organize and collectively bargain,” Gonzalez said in an email to Capital & Main. “Our laws need to catch up to the innovation happening in our economy to ensure independent contractors have a pathway to these workplace rights as well.”

Assembly Bill 1727 would not compel employers to classify independent contractors as employees.

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.”

Nonunion workers without the right to bargain collectively get the short end of the stick, say critics of the gig economy. “Unionized workers have on average 20 percent higher wages than their nonunion peers,” wrote Evan Butcher for the Washington, D.C.-based Center for Economic and Policy Research, last September.
Uber, the app-based, ride-hailing firm, is one of the best-known businesses that rely on independent contractors. The company sells labor services by arranging for individuals to drive their own cars as personal taxis to earn income. And in early 2016, Amazon.com, the popular online retail giant, began to expand its delivery of goods with independent contractor drivers through Amazon Flex. Continue reading

Virginia Is for Compliers: Easier to Fight Misclassification, Subcontracting Violators

 by Chaz Bolte

Chaz Bolte

Chaz Bolte

Virginia’s penalties for misclassifying workers in order to avoid paying insurance costs got a boost this month thanks to a new law.  The Virginia Workers Compensation Act made it easier for the state to take action against violators, according to Virginia Workplace Law:

The civil penalty is now up to $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000, plus collection costs.”  The VWCA requires every business owner with more than two employees (a part-time worker is counted as one employee) to have coverage for such worker.

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Sharecropping on Wheels

By Sarah Jaffe

standupforsavannahThe port of Savannah, Georgia generates some $14.9 million in income each year and brings in goods that are dispensed throughout the South—including to a massive Wal-Mart distribution center in the nearby city of Statesboro. Savannah is now the country’s fourth largest container port, and the fastest growing. Traffic at the port went up 11 percent between 2008 and 2012 even as the rest of the country suffered through recession.

The wealth generated at the port, though, hasn’t trickled down. While Wal-Mart and other retailers are doing just fine, the products they sell are transported by port truck drivers who still make low wages—a nationwide average of about $12 an hour. Since the industry was deregulated in the late 1970s, port truck drivers have been classified by their employers as “independent contractors,” meaning that they’re paid by the load, not by the hour, and the bosses don’t shell out for taxes or benefits.

“We need benefits, we need retirement just like everybody in the office does,” says port truck driver John Jackson, part of the Savannah Port Drivers Organizing Committee. “We’re doing all the work and they’re getting the gravy, in a sense. They’re getting a salary, they don’t have to pay out of their salary to try to keep equipment up.”

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REPORT: Misclassification Allows Subcontractors to Shave 26% off Payroll on the Backs of Workers

Photo by Paul Keheler
under creative commons license

by Chaz Bolte

According to Virginia’s new General Assembly Joint Legislative Audit and Review Commission (JLARC), the misclassification of construction workers as “independent contractors” is a problem that affects workers, business people, and the commonwealth alike. This is by no means breaking news to those in the know, but the problem is often downplayed, overlooked, or simply not elucidated enough for laymen to grasp its severity. In a big misclassification exposé on the We Party Patriot site, we highlighted its “triple jeopardy” effect.

When subcontractors purposefully label employees as independent businesses or “independent contractors,” they ignore payroll taxes, withholding, workers’ compensation premiums and unemployment insurance taxes. According to the JLARC, this form of payroll fraud allows subcontractors to reduce their payroll costs by nearly 26 percent, creating an unfair advantage in bidding against law-abiding construction companies.

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