In the last few weeks, there have been surveys that suggest that rideshare drivers and other independent contractors would rather have full-time employment – except for those who don’t.
The employment status of these workers has been much debated and will continue to serve as the centerpiece of future legislation at the state level and in Washington. How a society and its political leaders can reach a conclusion that satisfies these workers and the companies that pay them may be one of the most important questions as America defines the future of work.
Case in point: The Benenson Strategy Group conducted the first post-Prop 22 survey of California drivers and delivery workers and found that 76% believe Prop 22 has benefited them personally; 63% said they had already experienced changes to benefits, compensation or protections as a result of Prop 22; and 92% said those changes have had a positive impact on their lives.
Prop 22 was passed in California with 58% of the vote in the November election. The law exempted app-based drivers like those for Lyft, Uber and DoorDash from the state’s more restrictive AB5 legislation. AB5 classifies an employee as someone who is engaged in an activity that is central to the company’s existence.
But while the Benenson survey seems to suggest drivers in California are benefiting from maintaining their independent status, a survey from McKinsey, the McKinsey American Opportunity Survey, found that 62% of contract, freelance and temporary workers (27% of all survey respondents worked in contract, freelance or temporary jobs) would prefer full-time, permanent employment. Previous McKinsey research has found that only about 30% of workers actively choose independent work as their full-time occupation.
“This finding is perhaps unsurprising given that contract, freelance or temporary workers were more likely than other respondents to say that they have suffered decreased income over the past 12 months,” McKinsey wrote. “These workers were also nearly twice as likely than others to say that they could not afford health insurance (22%, compared with 13% for all) and more likely to cite access to affordable health care and insurance as barriers to their well-being.”
The McKinsey survey also noted that 70% of executives said they expected to use more of these workers going forward. But the firm made no distinction between contract, freelance and temporary workers.
McKinsey surveyed 25,000 Americans in the spring to reach its conclusions. Both surveys were released in May. It is estimated that 59 million Americans, roughly 36% of the workforce, work a gig job.
The Benenson survey found that 75% of respondents believe legislation like Prop 22 would benefit drivers in other states. It also found that 54% believe their driving situation would be worse if Prop 22 hadn’t passed.
“Of course, this doesn’t mean all drivers are in complete support of every aspect of the new legislation, but at the very least they firmly believe that Prop 22 is a better alternative to strict employee or independent contractor status,” the survey noted. “Throughout the Prop 22 campaign in California and still today, drivers overwhelmingly prefer independent contractor status.”
Benenson found that 84% said they prefer to be independent contractors compared to 17% who would prefer to be employees.
Last month, the U.S. Department of Labor (DOL) rescinded a rule instituted by the Trump administration in early January that many claimed would have made it easier for companies to classify workers as independent contractors.
The withdrawal of the rule by DOL’s Wage and Hour Division leaves the status quo in place but has many supporters of gig work concerned the current administration will push to classify the workers as employees.
“The rescinded rule was a needed update to the complicated economic realities test for independent workers. The rule reflected a modern view of the workforce and economy. The path sought by this administration is to move backward on behalf of political stakeholders rather than pushing forward and listening to the actual workers who are impacted by this policy,” the Coalition for Workforce Innovation, which represents companies that utilize independent contractors, said at the time.
The U.S. House passed the Protecting the Right to Organize Act (PRO Act) earlier this year, but it faces an uphill climb in the Senate, where it appears there are not the 60 votes needed to pass the legislation. The bill would create a federal definition of an independent contractor.
A set of bills proposed in New York would allow drivers to receive union negotiating rights. The bills would require “network companies” such as Uber and Lyft to sign “labor peace” neutrality agreements with a union experienced in representing network workers. The unions, if 10% of the drivers from one or more network companies sign authorization forms, would then bargain on behalf of all drivers for all network companies and once approved by a majority of workers, those negotiated terms would become state regulations governing the industry.
In his first proposed budget as president, Joe Biden wants to increase the budget for the Wage and Hour Division 18%, suggesting the administration will be more aggressive investigating what it deems improper worker classification cases.