Many gig workers, whether in new occupations such as ride-hail driver, or traditional ones such as janitor or truck driver, could soon become employees in California after a ground breaking state Supreme Court ruling last year.
The Dynamex case implemented a simple criteria called the ABC test under which someone is an employee if a company controls what they do; if their work is linked to a company’s primary business; and if they do not have an independent business performing that work.
Assemblywoman Lorena Gonzalez, D-San Diego, is sponsoring a labor-backed bill that would codify that test. But numerous companies have lined up against it, saying it would undermine the flexibility that both they and gig workers value.
A separate case based on different criteria was decided in the U.S. Supreme Court this week. The high court declined to hear an appeal by the California Trucking Association, leaving intact a decision that could result in widespread reclassification of state truck drivers as employees.
Gig workers lack a whole list of protections afforded employees, including minimum wage, overtime, paid breaks, family and medical leave, paid sick leave, unemployment insurance and workers’ compensation. Those costs would add about 41 percent on top of the cost of wages, according to Bureau of Labor Statistics studies.
A new report from the UC Berkeley Labor Center examined demographics and wages, as well as employers’ classification practices, with an eye to the impact that changing workers’ status might have. Independent contractors – the status most gig workers have – don’t get benefits and must pay their own employment taxes, among other differences.
According to the summary prepared by the San Francisco Chronicle “These industries that are some of the worst offenders in California (for misclassification) have a disproportionate share of workers of color, immigrants and low-wage workers,” said Sarah Thomason, a research and policy associate at the Labor Center who co-authored the report. “These workers are in vulnerable positions and being exploited.”
Contracted janitors, for instance, make a median hourly wage of $12.22, and are 80.9 percent Latino and 3.7 percent black. Almost half live in households defined as low income (below 200 percent of the federal poverty line).
The report estimated that 19 percent of California janitors are independent contractors, without suggesting how many are misclassified.
Among truck drivers, the median hourly wage was higher at $19.70 but drivers have high expenses, with many having to purchase a truck and pay for fuel, insurance, maintenance and repair. About 60 percent were Latino and 6 percent were black. About a fifth live in low-income households.
The report quoted a National Employment Law Project report that about four-fifths of drivers at ports are classified as independent contractors, with the majority misclassified.
For construction workers, median hourly pay is $14.98 with 73.2 percent being Latino and 2.3 percent black. About 40 percent live in low-income households.
If the ABC criteria becomes more widely applied, “definitely misclassification would not happen as frequently,” Thomason said.