Category Archives: worker classification

A new season for the Shameless economy?

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What’s going to happen on the next season of the Shameless economy?

Amazon made big news on Tuesday when it announced it was implementing a $15 minimum wage for all employees. 

Part of the story was why Amazon raised wages. Some pointed to low unemployment  while others pointed to popular criticism of Amazon’s labor practices. That criticism was expemplied by the Stop BEZOS Act targeting Amezon that was introducted in the Senate by Bernie Sanders.

The author of this blog falls into Amazon critics category. Last November I coined the phrase “Shameless” economy, based on the show Shameless, to describe how Amazon misclassifisied delivery dirvers as contractors.

While Amazon may win applause for raising the wages of employees, by classifiying workers as contractors they are excluding those workers from the benefits of emplyoees like unemployment and workers’ compensation. Amazon annouced this summer that it was expanding its own inhouse package delivery services and looking to contract  with “entrreprenuers”. Contractors aren’t covered by unemployment or workers’ compensation which are beneifts that are mandated by the government.  In other words, Amazon is growing its ranks of contractors which reduces its labor costs while receiving good publicity for raising wages for workers they classify as employees. 

If you watch Shameless you know the character Frank Gallagher. Frank is a terrible drunk and overall person. But occassionally Frank will seem to get his stuff in order only to fall back into his usual antics. Amazon’s labor practices are like Frank Gallagher’s behavior, every once in awhile he will get his stuff together and demand all sorts of credit. But sooner or later, as the millenials say on social media, he is back on his bulls***.

Keep an eye on Amazon.

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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What the big California worker classification case means and could mean

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The California Supreme Court made big news in the world of workers’ compensation and employment law last week when it adopted the employee-friendly ABC Test  for the purposes of California’s minimum wage law. The decision was seen as a set back for gig economy companies like Uber who classify their workers as independent contractors. 

The bigger story as pointed out by CNN Money reporter, Lydia DePillis , and widely acknowledged by attorneys and legal academics is the patchwork of different state labor laws and how they will impact the gig economy and workers. My room temperature take is that employee classification laws aren’t even consistent within states. Nebraska has adopted the ABC test for the purposes of unemployment and for our wage payment act by statute. But Nebraska imposes the more employer-friendly right of control/economic reality test by case law for the purposes of workers compensation.

Labor Secretary Alexander Acosta has called for an update of labor and employment laws to aid the gig economy. Experienced workers’ compensation attorneys may view the fight over the classification of gig economy workers as a potential threat to their practices but as essentially an old issue that has new prominence because of the rise of companies like Uber. But worker classification legislation is only part of the story about how the rise of the gig economy could change workers’ compensation laws. Advocates for injured workers need to understand how so-called “portable benefit” schemes could change workers’ compensation laws. If enacted, portable benefits laws could radically alter the grand bargain behind workers’ compensation laws. They could also provide more uniformity of laws regarding employee benefits and protections like workers’ compensation

A portable benefit is defined as a benefit that is paid into an employer-sponsored plan that can be transferred to a new employer or to an individual who is leaving the workplace.[At least when it comes to health insurance, portability has some real benefits for workers’ rights. Employees aren’t tied to a potentially abusive employer just for the sake of keeping their health insurance. Candidly any portable benefits scheme that expands health insurance coverage would also help workers who do not have health insurance. The pro-worker potential of portable benefits was recognized by the National Employment Law Project who issued a report with the Roosevelt Institute about how portable benefits could be implemented.

But other portable benefit plans developed by Washington D.C. think tanks run the gamut from the really bad to the just bad.

MIT economist Jonathan Gruber, who was influential in the design of the Affordable Care Act, wrote a paper for the Aspen Institute that proposed catch-all individual security and retirement accounts as alternatives or replacements for workers’ compensation and unemployment insurance.  Without anything in the way of attribution, Gruber breezily states that higher workers’ compensation benefit payments create a “moral hazard” which leads to more injuries and longer durations of injuries. Gruber then goes on to propose that injured workers exhaust their individual security accounts before they collect workers’ compensation benefits and that workers’ compensation benefits be subject to federal taxation. It is important to note that Gruber doesn’t limit his proposal for portable benefits to gig economy workers.

Economists Seth Harris and Alan Krueger have proposed a somewhat more worker-friendly portable benefits scheme designed for gig economy workers to be paired with a new type of employee classification between employee and independent contractor for workers in a paper did they did for The Brookings Institute. The Harris-Kruger plan would allow gig economy employers to “opt-in” to state workers’ compensation laws. But even the more worker-friendly Harris-Krueger portable benefits scheme was created mainly to reduce litigation costs for gig economy companies. Former National Labor Relations Board member and associate counsel for the AFL-CIO, Craig Becker, pointed out that creating a new class of workers may create more litigationwhen employers try to re-classify employee as a new class of worker.[5] Becker and others pointed out that this is what happened in Italy when Italy created a third class of worker that was neither employee nor independent contractor. Legislation has been introduced in California that is along the line of the Harris-Krueger plan.

Many plaintiff’s lawyers seem to, or at least want to, believe that since workers’ compensation laws were enacted under 10th Amendment police powers then workers’ compensation laws are a matter of “state’s rights” and so-called federalization is uncalled for and unconstitutional. Congress has broad authority under its taxing power to effect economic activity that is beyond even the broad scope of its power to regulate individual commerce. The individual mandate of the Affordable Care Act was found to be constitutional under congressional taxing authority even though the mandate exceeded congressional authority to regulate interstate commerce. Recently passed changes to tax law have encouraged workers to take independent contractor status.

Besides workers’ compensation, the other mandated benefits that stem from the employee-employer relationship — unemployment, Medicare and Social Security — are all effectuated in whole or in large part through federal taxes. If a portable benefits are implemented on a nationwide basis, it will likely happen through the tax code and they could be enacted in a constitutionally valid way. Any discussion about the impact of the gig economy on worker classification laws should include discussion about portable benefits proposals.


 

The offices of Rehm, Bennett & Moore, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in Constitutional law, worker classification, Workers Compensation and tagged , , .