Jan 10, 2017

Upcoming N.Y. bill offers labor compromise for Uber and others

Handy, a New York City-based on-demand service for home services, is pushing for legislation that could create a compromise for contract workers who want employee benefits, according to Bloomberg.

Details: The legislation would allow for companies like itself and Uber to contribute 2.5% of each transaction to fund "portable benefits"—perks like sick leave, which workers can keep independently from their employers.

The upside: This could help alleviate the ongoing tensions between these on-demand companies, and workers and labor advocates.

  • Companies like Uber continue to resist classifying their drivers as employees largely because of the costs of full benefits. This way, workers would still retain the flexibility of being a contract worker, yet get some labor protections.
  • It likely would also allow companies to provide more training and other directives, which has been tricky—too much control over contractors can make for a legal basis for treating them as full employees.

The downside: It would nevertheless require companies to devote a portion of their revenue to these benefits. Ride-hailing and other on-demand services already have rather slim margins, so they'd be forced to either give up some of their revenue, or squeeze it from their workers' cuts.

What's next: New York State Senator Diane Savino plans to introduce the bill this month with the assembly's majority leader. For its part, Handy, which currently faces a lawsuit over its classification of workers as employees, hopes this New York legislation becomes a model for other states and even at the federal level.

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