TIME Labor

New York Moves to Raise Minimum Wage for Fast Food Workers to $15 an Hour

Gov. Andrew Cuomo has made raising the minimum wage a personal mission

On behalf of New York Gov. Andrew Cuomo, a special panel—the Fast Food Wage Board—recommended that the state’s minimum wage for employees of fast-food chain restaurants be increased to $15 an hour. The previous minimum wage—enacted on December 31, 2014—for fast-food workers in New York City was $8.75 per hour; the new minimum wage represents a 70% increase.

Under the board’s recommendation, the wage would take effect first in New York City by 2018, then be expanded to the rest of the state. The decision will circumvent the state’s legislature and move straight to the New York state labor commissioner, where it is likely to be approved.

The decision follows that of other large cities that have moved to increase their minimum wages, such as Seattle, San Francisco, and Los Angeles. On Tuesday, the University of California moved to raise its hourly minimum wage to $15 per hour, affecting 3,200 of its 195,000 employees.

Cuomo has long advocated for the minimum wage hike, writing in an op-ed in The New York Times in May that “nowhere is the income gap more extreme and obnoxious than in the fast-food industry.”

TIME Labor

Uber Challenges Class-Action Lawsuit in New Motion

Uber
Andrew Harrer—Bloomberg/Getty Images The Uber Technologies Inc. logo is seen on the ground at Ronald Reagan National Airport (DCA) in Washington, D.C. on Nov. 26, 2014.

The company's lawyers argue that the 160,000 Uber drivers in California have "little or nothing in common"

Uber filed a motion in a California court Thursday opposing a class action lawsuit against the company, marking the latest salvo in the increasingly pitched battle over how workers are treated in the multi-billion dollar on-demand economy.

The lawsuit filed in California’s Northern District Court alleges that Uber drivers in California should be classified as employees rather than independent contractors. Uber challenged the certification of the class in its motion, arguing that the more than 160,000 Uber drivers in the state have “little or nothing in common,” aside from having downloaded and used the Uber app “at some point over the past six years.”

The suit is one of several pending cases that could have profound implications for the on-demand economy, which includes some of the world’s hottest technology startups. Companies like six-year-old Uber, now valued at $50 billion, have been able scale fast in part because they classify many of their workers as independent contractors, which frees them from costly obligations like remitting payroll taxes and paying worker’s compensation and other duties that typically accompany an employer-employee relationship. Nor does the company reimburse drivers for expenses like gas and car maintenance, which the lawsuit alleges are owed to tens of thousands of drivers for years of work.

In its motion, Uber argues that a successful class action suit “could force Uber to restructure its entire business model.” It could also have a ripple effect across the burgeoning startup culture, leading other companies with similar structures to recalibrate. In addition to the case against Uber, lawsuits challenging the status of workers are pending against Lyft, Uber’s chief U.S. rival; Postmates, which offers on-demand delivery; Homejoy, which offers on-demand cleaning; and Instacart, an on-demand grocery shopping service.

The lawyers pursuing these cases believe that the companies are skirting labor laws by identifying themselves as technology platforms that connect willing workers with users who need services, rather than, say, a taxi service that employs drivers. “They’re claiming there’s something new and different because their services are provided through technology, through a smartphone,” Shannon Liss-Riordan, the lawyer for the plaintiffs in the suit against Uber, told TIME in an earlier interview. “But there’s nothing new about this.”

Uber is adamant that they are not a traditional employer. Its motion challenging the class certification emphasizes the variety among drivers, the different amounts and ways they use Uber’s app and the various terms of agreement they have with the company. The filing also included declarations of from about 400 drivers in the state, many of whom say they value the freedom of the current arrangement and don’t want anything to change. “I don’t want anyone to take away this flexibility by suing Uber,” writes an L.A.-based UberX driver named Janice Fry.

The company says a ruling against it could eliminate that independence. “As employees, drivers would drive set shifts, earn a fixed hourly wage, and lose the ability to drive using other ridesharing apps as well as the personal flexibility they most value,” Uber said in a statement.

For example, Uber emphasizes that many of its drivers also work for competing companies like Lyft and Sidecar, and sometimes have multiple companies apps on at once. In its motion, Uber claims the suit “would force drivers to pick one app over all others.”

Yet that would only be the case if Uber and its competitors required drivers to do so under a legal principle known as duty of loyalty, which gives companies the right to sue two-timing workers. The companies could instead lay out terms that allow employees to work for more than one ride-app outfit. “They could promise to waive that right,” says Sachin Pandya, a law professor who specializes in labor and employment at the University of Connecticut. “There’s no prosecutor going around charging workers for being disloyal.”

But certifying the drivers as employees could introduce other tricky questions. If an employee-driver is riding around with both Uber and Lyft apps on, for instance, which company would be on the hook for reimbursing them for gas? Which company would need to make sure they take legally required breaks?

To showcase the variety of situations that Uber drivers are in, the company states that there are 17 different terms of agreement that drivers have agreed to over time. They emphasize that while some drivers essentially work full-time, others use Uber to supplement income from a part-time job, or hire subcontractors. While some follow Uber’s “suggestions” on how to act or dress or comport themselves, others do not, they say. Drivers work when they want, where they want, as much as they want, being paid per job rather than being assured minimum wage and overtime. Drivers can choose to accept requests or contact Uber to ask for a fare to be lowered (if they made errors), they write.

Many of these details speak to arguments about control over a work environment that are key elements of arguments over employee status. How much control Uber has in writing, and in practice, can heavily weigh judges’ opinions about how workers should be classified. In a recent California Labor Commission ruling, for instance, a commissioner deemed an Uber driver to be an employee in part because Uber was “involved in every aspect of the operation.”

That ruling determined the status of only one driver, and Uber has appealed it. If the district court lawsuit is certified as a class action, it has the potential to affect far more workers. A hearing is scheduled for August.

TIME White House

Millions More Americans Will Qualify for Overtime

overtime
Getty Images

The maximum salary for exemption will more than double

Millions more American workers will be eligible for overtime under new eligibility rules to be released Tuesday, according to reports.

Under current federal regulations, workers making more than $23,660 are not guaranteed overtime. The new rules will boost that to $50,440, Bloomberg reports.

Proponents of the regulation say it would protect workers below the poverty line who are not currently compensated for their work beyond 40 hours per week. Critics say it could cause some businesses to hire more part-time workers rather than pay their managers overtime.

The rules, which received their last major update in the 1970s, are part of a second-term effort by President Obama to help working-class Americans without going through Congress.

[Bloomberg]

TIME Labor

Why the California Ruling on Uber Should Frighten the Sharing Economy

The question at the center of several similar cases is likely worth billions

This week a ruling from the California Labor Commission was made public because popular ride-sourcing company Uber appealed it. A San Francisco-based driver named Barbara Ann Berwick brought a case alleging that she is an employee, not an independent contractor as Uber claims. It emerged that the commission ruled in her favor, saying the company owed her $4,152 in expenses. But this could lead to rulings worth much more.

Filed in March, the ruling is non-binding, has no legal bearing on any other drivers, and won’t force any money to change hands. But Uber’s decision to appeal will now move the fight to California’s court system where — along with several similar lawsuits pending in the state—it could set a binding precedent for a multi-billion-dollar question plaguing the booming on-demand economy: Do such companies have employer-employee relationships with tens of thousands of American workers?

That might sound like a mundane bureaucratic distinction, but it’s a concrete reality for the drivers, personal shoppers and lunch deliverers who enjoy the flexibility of setting their own hours but do not get standard employee benefits like overtime pay and worker’s compensation. In California, unlike most other states, employers are explicitly on the hook for reimbursing employees for all expenses necessary to do the job. And if the workers like Berwick win their cases, there are more than 15,000 other drivers in San Francisco alone who might want to be reimbursed too.

“Uber has essentially shifted to its workers all the costs of running a business, the costs of owning a car, maintaining a car, paying for gas,” says Shannon Liss-Riordan, a Boston-based attorney who has a class-action case pending against Uber in California federal court. “Uber has saved massive amounts …. It’s important that the labor laws be enforced so that the companies can’t take advantage of workers that way. Uber’s a $50-billion company and I think it can afford to bear the responsibilities of an employer.” She expects her trial will be underway by next year and will make arguments for class certification later this summer, saying this ruling “could be a lot of help.”

In a statement to TIME, an Uber spokeswoman said that its drivers embrace their status as independent contractors. “It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control,” she says. “The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies. We have appealed this ruling.”

Liss-Riordan has also filed a class-action case on behalf of workers for house-cleaning company Homejoy, as well as delivery service companies Postmates and Try Caviar, arguing that they have been misclassified as independent contractors when they should be treated like employees. Other cases are pending against ride-sourcing platform Lyft and grocery-delivery company Instacart. “Instacart does all it can to distance itself from the employer-employee relationship,” lawyer Bob Arns told TIME when that case was filed. “Why does a company want to do that? It’s to keep the bottom line lower, to unfairly compete against other companies. That’s the crux of our case.” Instacart did not respond to a request for comment for that story.

The growing independent-contractor workforce is a key reason that companies like Instacart and Uber have been able to grow so quickly, because the cost of organizing independent contractors is much less than hiring employees. There’s no requirement to pay unemployment tax or ensure that workers are making at least minimum wage. In many cases, the companies don’t have to pay for the smartphones or data plans workers use on the job. They don’t have to deal with the costly spools of red tape that come with federal and state withholdings and healthcare and anti-discrimination laws.

David Rosenfeld, a labor law expert and lecturer at the University of California, Berkeley, says a California superior court will likely set a trial date in a few months. If the judge agrees with driver Berwick, the rulings could be appealed back and forth all the way up to the California Supreme Court. That process could take years. But the California courts have been sympathetic to workers and Rosenfeld says its unlikely the state’s highest authority would overturn a ruling made in their favor. In the meantime, he says, lawyers like Liss-Riordan can “show the ruling around” as evidence that helps build their cases, if not a precedent to use in court.

“This is big, high stakes problem for them,” Rosenfeld says. While Uber emphasizes that the labor commission ruling is only about the status of a single driver, he notes that if Uber beats Berwick in court that doesn’t bar other drivers from bringing similar claims. Liss-Riordan says she has been contacted by more than 1,000 Uber drivers who believe they’ve been wronged. And her doors have been open to other “1099 economy” workers who want to file their own claims.

“A lot of companies are watching Uber and seeing whether it’s going to be allowed to get away with this,” she says. “These companies want to have it all. They want to have control over their workforce so they can provide this consistent quality service they sell to the public but at the same time deny it has any obligations to these workers that it is treating as their employees.”

How much control companies like Uber have over these workers will be central to the cases. Does their ability to kick drivers off the platform, their ability to set rates, their mandates to follow certain protocols amount to an employer-employee relationship? Uber has repeatedly argued that they are not a transportation company but merely a technology platform that helps willing drivers connect with passengers willing to pay for a ride.

But in denying a summary judgment in the class-action case earlier this year, District Judge Edward Chen wrote that Uber’s claim that it is not a “transportation company” is “fatally flawed.” In the March ruling, the labor commissioner wrote that Uber is “involved in every aspect of the operation.” A 2012 ruling from the labor commission, however, found that another Uber driver was, in fact, an independent contractor and describes Uber as a “technology company.” In the statement, Uber says similar commissions in five other states have come to the same conclusion.

These cases apply only to workers in California. So the endgame could look a few different ways if these on-demand companies lose their cases, all of which would require a change in business models. Operations could be shut down or take a different approach in California. Companies could start shouldering the costs of treating their armies of workers as legal employees. Or they could change the way they operate—giving up control over their workers and therefore control over the quality of their services—in order to keep treating them as independent contractors.

The latter, Rosenfeld says, is what FedEx recently decided to do after paying $228 million to settle claims from 2,000 pickup and delivery drivers in California who alleged that they were mislabeled as independent contractors. That high ticket price was directly related to California’s law requiring expense reimbursement. But making the decision to give up oversight is not an easy one. “You lose control of your brand,” he says. “And you lose control of your model.”

Uber v. Berwick California Labor Commission Ruling

TIME BMW: A Company on the Edge

See the Army of Robots It Takes to Build a BMW

Inside BMW's Biggest Manufacturing Plant, in South Carolina

Automakers depend on a lot to get consumers to buy their wares: quality, performance, design, technology. But the single most important factor in keeping an automaker profitable in the long term is likely manufacturing. Investing in a new model—and the plants and components that of into making them a reality—can easily run into the billions of dollars.

BMW, the world’s top-selling premium automaker by sales volume, has been expanding its lineup while attempting to maintain its profitability. As part of a strategy, partly overseen by its 49-year-old CEO, Harald Krueger, BMW has been aiming to make 30% more vehicles with the same number of workers while trying to reduce production costs per vehicle by raising economies of scale in components, drive systems and modules. Here take a closer look at what goes into making a BMW.

TIME Labor

These 5 Charts Show How Hard it is for Americans to Take a Vacation

Americans have seen nearly a full week of vacation disappear from their lives

Memorial Day weekend is upon. It’s time to hit the road as vacation season officially kicks off–that is unless you’re like the majority of Americans who’ve cut back on their beach time. In the 1980s, employed Americans took up to 21 days of paid vacation each year. By 2013, that number had shrunk to 16, according to research performed by Oxford Economics for Project Time Off.

To read more about America’s vacation problem, see this week’s TIME magazine.

It’s important to note many employees do have access to vacation. Data from the Bureau of Labor Statistics (BLS) shows that access to paid time off (PTO) remains above 90 percent among private industry employees, shrinking only 2 percentage points since 1989.

Access to paid vacation 1989-2014

chart1

The chart above includes all full-time employees in private industries–the primary employers in the U.S.–including small and large businesses. “Larger companies traditionally offer relatively good access to benefits, like paid time off”, says Elizabeth Ashack, an economist with BLS. But the availability of paid vacation varies greatly among occupations within the private industry.

Access to paid vacation by sector in 2014

chart2

Only 55 percent of service jobs offer paid time off (compare that to management and financial positions which come in at 96 percent, the highest level among the above occupations). Without a federal mandate for paid time off or paid sick leave, private industries are left to their own discretion, often resulting in unequal access across occupations.

Ashack says that employers may offer better benefits to keep workers from jumping ship in good times, but in bad times those benefits worsen, evidenced by cuts during the economic downturn of 2008 to 2009.

Likewise, the amount someone makes is a good indicator of the quality of paid time off they receive.

Access to paid vacation by income groups 2014

chart3

Those making the lowest wages are the least likely to have paid leave, with a steady increase in access as wages rise.

For those with access, the use of paid time off has declined sharply in the past decade to an average of 16 days taken each year–an all time low within the past four decades.

Annual vacation days used among employed adults 1978 – 2013

chart4

The U.S. Travel Association, a trade group which encourages Americans to travel, funded Project Time Off to measure the economic impact of the decline in vacation time. They found that among employees with access to paid time off, nearly five days went unused in 2013, and 1.6 of those days did not carry over to the next year. That totals to 169 million days of lost vacation time for Americans.

By surveying the hours worked by employees, BLS measures the percent of the American workforce on partial (less than 35 hour work week) or full vacations on any given week. Analysts noticed a decrease in full-week vacations, and a corresponding increase in partial week vacations, yet another measure indicating that Americans need a break.

Percentage of employed adults on full or partial-week vacations 1978 – 2013

chart5

 

TIME India

Greenpeace India Employees to Work for Free Following Delhi’s NGO Crackdown

Samit Aich, executive director of Greenpeace India, gestures as he addresses the media during a news conference in New Delhi, India, May 21, 2015
Adnan Abidi—Reuters Samit Aich, executive director of Greenpeace India, gestures as he addresses the media during a news conference in New Delhi, India, May 21, 2015

"The government has made it impossible for us to operate, but our employees are willing to work without pay"

Weeks after Greenpeace India said that it might have to shut down owing to regulatory action to block its bank accounts, the environmental group’s employees have pledged to work for free to keep the organization going.

“The government has made it impossible for us to operate, but our employees are willing to work without pay for one month because they see that the larger commitment has always been to fight against injustice,” Greenpeace India head Samit Aich said on Thursday.

In a letter to Aich, more than 200 Greenpeace India employees said they would support the organization by continuing to “work for at least a month, without pay, starting June 1.”

Citing irregularities in the accounting of foreign aid, India’s Home Ministry took the action against the local arm of the international environmental group as part of a wider crackdown on nongovernmental organizations, Reuters reports.

Separate from the action against Greenpeace India, Indian officials have also placed the Ford Foundation on a security watch list, thus increasing scrutiny of its activities in the South Asian nation.

Among those who have spoken out against the Indian government’s moves targeting nongovernmental groups is the U.S. ambassador to India, Richard Verma, who in a speech in New Delhi earlier this month expressed concern about the regulatory steps against such organizations.

“I read with some concern the recent press reports on challenges faced by NGOs operating in India,” he said.

“Because a vibrant civil society is so important to both of our democratic traditions, I do worry about the potentially chilling effects of these regulatory steps focused on NGOs.”

TIME Workplace & Careers

Millennials Now Largest Generation in the U.S. Workforce

They surpassed Generation X earlier this year

Millennials have now surpassed Generation X to become the largest generation in the American workforce, according to a Pew Research Center analysis of U.S. Census Bureau data.

Adults between the ages of 18-34 now make up one in three American workers, Pew reports. They outnumbered working adults in Generation X, who were 18-33 in the year 1998, in early 2015 after overtaking Baby Boomers last year.

The estimated 53.5 million millennials in the work force are only expected to grow as millennials currently enrolled in college graduate and begin working. The generation is also growing thanks to recent immigration, as more than half of new immigrant workers have been millennials.

The millennial generation as a whole, not just those in the labor force, is also expected to surpass the Baby Boom generation as the largest living generation in the U.S.

 

TIME Workplace & Careers

New York Governor Acts to Protect Exploited Nail Salon Workers

A customer receives a manicure at Castle nail salon in New York City on Jan. 8, 2015.
Bebeto Matthew—AP A customer receives a manicure at Castle nail salon in New York City on Jan. 8, 2015.

Andrew Cuomo's emergency measures include a multiagency taskforce conducting immediate salon-by-salon investigations

New York Governor Andrew Cuomo unveiled emergency measures on Sunday to protect thousands of workers in his state’s nail salon industry from wage theft and health hazards.

A new multiagency task force will immediately conduct salon-by-salon investigations, protect manicurists from chemicals in nail products, and educate workers on their rights, Cuomo said in a statement.

The measures come days after the New York Times published online an indepth investigation into the exploitation of nail manicurists, many of whom are severely underpaid and regularly exposed to potentially dangerous chemicals.

“We will not stand idly by as workers are deprived of their hard-earned wages and robbed of their most basic rights,” Cuomo said in a statement, according to the New York Times.

Nail salons that do not comply with orders to pay workers back wages will be shut down, according to the new rules.

[NYT]

TIME Labor

The Bloody Story of How May Day Became a Holiday for Workers

Women workers in the May Day Parade in Union Square demand a
New York Daily News Archive / Getty Images Women workers in the May Day Parade in New York City in 1936

The story goes back to 1886

Celebrations on May 1 have long had two, seemingly contradictory meanings. On one hand, May Day is known for maypoles, flowers and welcoming the spring. On the other hand, it’s a day of worker solidarity and protest; though the U.S. observes its official Labor Day in September, many countries will celebrate Labor Day on Friday.

How did that happen?

Like so many historical twists, by complete accident. As TIME explained in 1929, “To old-fashioned people, May Day means flowers, grass, picnics, children, clean frocks. To up-and-doing Socialists and Communists it means speechmaking, parading, bombs, brickbats, conscientious violence. This connotation dates back to May Day, 1886, when some 200,000 U. S. workmen engineered a nationwide strike for an eight-hour day.”

The May 1, 1886, labor action wasn’t just any strike—it was part of what became known as the Haymarket affair. On May 1 of that year, Chicago (along with other cities) was the site of a major union demonstration in support of the eight-hour workday. The Chicago protests were meant to be part of several days of action. On May 3, a strike at the McCormick Reaper plant in the city turned violent; the next day, a peaceful meeting at Haymarket Square became even more so. Here’s how TIME summed it up in 1938:

A few minutes after ten o’clock on the night of May 4, 1886, a storm began to blow up in Chicago. As the first drops of rain fell, a crowd in Haymarket Square, in the packing house district, began to break up. At eight o’clock there had been 3,000 persons on hand, listening to anarchists denounce the brutality of the police and demand the eight-hour day, but by ten there were only a few hundred. The mayor, who had waited around in expectation of trouble, went home, and went to bed. The last speaker was finishing his talk when a delegation of 180 policemen marched from the station a block away to break up what remained of the meeting. They stopped a short distance from the speaker’s wagon. As a captain ordered the meeting to disperse, and the speaker cried out that it was a peaceable gathering, a bomb exploded in the police ranks. It wounded 67 policemen, of whom seven died. The police opened fire, killing several men and wounding 200, and the Haymarket Tragedy became a part of U. S. history.

In 1889, the International Socialist Conference declared that, in commemoration of the Haymarket affair, May 1 would be an international holiday for labor, now known in many places as International Workers’ Day.

In the U.S., that holiday came in for particular contempt during the anti-communist fervor of the early Cold War. In July of 1958, President Eisenhower signed a resolution named May 1 “Loyalty Day” in an attempt to avoid any hint of solidarity with the “workers of the world” on May Day. The resolution declared that it would be “a special day for the reaffirmation of loyalty to the United States of America and for the recognition of the heritage of American freedom.”

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