A new survey conducted in conjunction with the Project for Middle Class Renewal at the University of Illinois Urbana-Champaign and the Illinois Economic Policy Institute found that drivers are divided about whether or not they should be classified as employees, but not about their rights as workers. (The Illinois Economic Policy Institute, or IEPI, is different from EPI, the research arm of the AFL-CIO, which has published other data on the topic.) The IEPI’s “Quality of the Gig” study, the results of which are being released for the first time here in Crain’s Chicago Business, found that the conditions under which many drivers work are not optimum.
Among the findings: About 40% of drivers make less than Chicago’s minimum wage; 75% report avoiding taking bathroom breaks while working; and 59% have experienced verbal violence or harassment while driving, while shouldering the expense of health insurance and vehicle purchase and maintenance. Slightly more than half of the 502 drivers surveyed (54%) responded that they thought drivers should be employees of the firms for which they work, while 90.8% thought they should have the right to unionize.
The results of this research differ from other studies, including those from the IRS and Pew Research Center, which underscores the complicated nature of the issue. At odds are desires to properly classify those who are working as employees while balancing concerns about misclassifying independent contractors, who largely don’t face the same challenges as the app-based workers in the IEPI research. Independent contractors, including long-haul truckers, musicians, dance instructors, hairdressers and shopping-mall Santas, report making good incomes, funding their own retirement savings, paying their own self-employment taxes, buying their own health insurance policies and enjoying the freedom that owning a business can provide.
California’s Assembly Bill 5, known as AB5, went into effect Jan. 1, 2020, in an attempt to address these issues and has had a long list of problems, carve-outs and unintended consequences. Proposition 22, passed in November 2020, aimed to rectify those but then faced its own legal challenge. While the IRS currently has a test that defines independent contractors, California is using a 1930s-era test called the ABC Test, which can misclassify independent contractors as employees.
“I was horrified when I heard about AB5,” says Jennifer Murtoff, a freelance translator, educational publisher and musician, who also owns a consultancy helping those who want to raise backyard chickens. “The government has no right to take away the way I want to work.”
Murtoff, who lives in the western suburbs, loves the flexibility her work life affords her, as she can pursue her various interests. Murtoff has heard about freelancers in California who have been dropped by clients who are concerned about hiring independent contractors for repeat assignments. She is concerned about what would happen if similar legislation were passed in Illinois, as much of her work since 2006 has come from clients who contract her services multiple times. It seems unlikely, she adds, that educational publishers who have assignments on a cyclical basis would make their current contractors employees. The loss of those kinds of assignments would be deleterious to her bottom line.
Study co-authors Robert Bruno, a professor at University of Illinois Chicago and director of the Project for Middle Class Renewal, and Frank Manzo, executive director of IEPI, believe flexibility concerns are less relevant in a post-pandemic world, where asynchronous and remote work is more common. But independent contractors who are small-business owners and sole proprietors control more than their workplaces, making decisions about the kind of assignments they accept and how they complete them.
State Rep. Marcus Evans, D-Chicago, along with others in the Illinois General Assembly, is working on a bill that could be introduced as early as February that would address these issues.
“I’m glad California got out ahead of us and did it so we can now avoid some of their mistakes,” Evans says. He was a co-chair of the Illinois Future of Work Task Force, which produced a report last year highlighting some of the concerns of small-business owners and gig workers while making some recommendations. One possibility is to introduce a third class of worker, someone who is neither a traditional employee nor a traditional small-business owner.
And Springfield is not the only entity looking at the issue. On the federal level, the Protecting the Right to Organize Act, or PRO Act, passed the House but failed in the Senate, in part because some lawmakers wanted to see language that would protect self-employed business owners. The U.S. Department of Labor is also looking at changes to the way independent contractors are classified. The U.S. Chamber of Commerce, the National Retail Federation and other organizations have opposed such changes.
For their part, Bruno and Manzo are less concerned with the legal classifications than they are with the conditions such workers experience. The recommendations of their new report include requiring sexual harassment training for drivers, paying drivers for all of their time worked—not just their “engaged” time—and removing the rating system that discourages drivers from canceling a ride even when they feel unsafe.
Adds Bruno: “You can improve the quality of work for independent contractors while that debate plays out.”
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January 30, 2023 at 09:11AM