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News Analysis: Bill Would Redefine Employment Status

New York state is poised to either help workers or hurt businesses — depending on where you stand on the definition of the word “employment.”

Assemblywoman Deborah Glick, D-New York City, has proposed A.8721 to redefine employment in the state Labor Law to reclassify more workers as employees rather than independent contractors in order for workers to receive health and retirement benefits.

The legislation would add a subdivision requiring businesses to demonstrate that a person is free from the control and direction of the business in connection to performance of a job, both under the contract the freelancer signs and in fact; that the person performs work that is outside the usual course of a hiring entity’s business; and that the person is part of an independently established trade, occupation or business of the same nature as that involved in the work performed. If a business does not demonstrate all three conditions, then the person providing the services or labor would be classified as an employee rather than an independent contractor.

“This bill addresses one of the largest dichotomies in America today — the power of corporations versus the most basic human rights of American workers to a voice on their jobs and a role in shaping their futures,” Glick wrote in her legislative justification. “It is a David vs Goliath battle that New York state has a responsibility to address. Large corporate entities, such as Uber, Lyft, and Amazon, benefit from the current rules that classify workers as independent contractors rather than employees.”

There are few exemptions listed in the bill text. Drivers who distribute meat, vegetables, fruit or bakery products, beverages other than milk or laundry or dry cleaning services are exempt. Professional musicians, some construction employees, commercial goods transportation industry, some traveling salespeople and professional models could be exempt if they meet conditions stipulated in the law.

In addition to affecting members of the “gig” economy who work for companies like Lyft and Uber, the New York legislation would affect newspaper carriers, freelance writers and columnists.

California, which passed Assembly Bill 5 in September to accomplish a similar goal, has left some businesses scrambling. The Los Angeles Times reported that hiring workers as employees rather than contractors can between 20% and 30% to labor costs through Social Security and Medicare taxes, unemployment and disability insurance, workers’ compensation, sick leave, minimum wage, overtime, rest breaks and protections against discrimination and sexual harassment.

“By classifying them as independent contractors, they strip these workers of an avenue to have basic benefits – like vacation, sick pay, retirement, and health care for them and their families – addressed in any coherent fashion,” Glick wrote. “This has led to the disturbing trend in which these workers have to rely on public assistance and benefits, as well as working two or three jobs, to make ends meet while many of these corporate giants that employ them offer these workers no benefits and pay nothing in taxes. This bill challenges this imbalance by giving these workers, who endure the misfortune of not having control of any workplace issues, an ability to be recognized as employees and to work together with their peers to improve their rights and working conditions. New York has always been a leader in protecting the rights of workers. This bill will help the millions of New Yorkers currently stuck in the swamp of employer dominance of their working lives.”

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