At the same time, these companies insist on defending a controversial business model, one in which they view their workers as independent contractors, rather than employees who are entitled to traditional benefits and protection such as workers’ compensation, unemployment insurance, family leave, sick leave, or the right to unite .
“Right now we’re at a crossroads,” said Shannon Liss-Riordan, a Boston lawyer who has been challenging Uber and Lyft through seven lawsuits over workers’ classification for seven years. “If he tackles the challenge, Marty Walsh could have one of the biggest impacts on labor in this country since Frances Perkins,” she said, referring to Franklin D. Roosevelt’s Labor Secretary, who was the chief architect behind the New Deal.
New industry, known problems
While Walsh has yet to elaborate on the issue of app-based classification for conservative workers, labor experts and friends who have known him professionally during his career say he is encouraged by his background in working for construction workers, who have long dealt with the subject of subdivision.
“In construction, when contractors reclassified their workers from employees to independent contractors, it was just a scam to save money,” said Mark Erlich, an associate of the Harvard Labor and Work Program, former executive secretary of the Treasury. served New York. England’s local council of carpenters and what Walsh has known for about 20 years. ‘What is different now is that it is no longer [viewed as] a ‘scam’, that is [positioned by the companies] as a beautiful scheme – a new concept of work in which you are your own boss, with the planning of flexibility – it is actually considered desirable.
The companies have long defended their business model, which was popular with Uber during the last recession, claiming that workers are more flexible when viewed as independent contractors than employees. But there is nothing stopping companies from offering flexibility to employees. Rather, it is a business decision – and, according to critics, exploits workers in an effort to keep costs low for businesses.
In a statement, a Lyft spokesman said the company was looking forward to working with Walsh and the new administration “to strengthen opportunities for app-based workers.” An Uber spokesman agrees with the sentiment, saying it “supports efforts to ensure workers’ independence while providing drivers and delivery staff with new benefits and protection.” ‘
Instacart and DoorDash pointed out CNN Business to a spokesman for the App-Based Work Alliance, which is a coalition owned by Uber, Lyft, Instacart, DoorDash and Uber.
“Our country’s independent workforce has been instrumental in helping our communities overcome the many challenges we faced in this pandemic. We look forward to working with the Biden-Harris administration, including the Secretary of Labor, to the rapidly evolving needs of the workforce of the 21st century, “Whitney Mitchell Brennan, a spokeswoman for the App-Based Work Alliance, told CNN Business in a statement.” We encourage Mayor Walsh to promote federal policies that will support the growing economy on demand. “
Representatives of Walsh and the White House did not respond to requests for comment. Walsh’s appointment as Labor Secretary depends on Senate approval. At his confirmation hearing Thursday, Walsh spoke of the most important moments in his life – from cancer as a child, to the footsteps of his father’s union work and recovery from addiction – which informed him how he viewed the department’s work. of Labor.
“Protecting workers, equal access to good work, the right to join a trade union, continuing education and training, access to mental health and drug use. It’s not just for my policies, I have lived it,” Walsh said. said. “Millions of American families need it now. I’ve spent my entire career at various levels fighting for them.”
Walsh was not asked about his position on the classification of performance workers, but he did support the PRO law, legislation that was re-introduced by Democrats on Thursday and which would significantly change existing labor legislation and make it easier for workers to to unite. “This is one step towards helping people to organize freely. I believe in the right of organization. I do believe in the right that people can join a union if they want to join the union. That is why I support it certainly is, Walsh said.
The PRO law has implications for the gig economy, as it would implement an “ABC” test (which the gig companies in California fought against) to determine if an employee is an employee or a contract worker, if it succeeds.
Walsh’s Department of Labor can have a significant impact on the classification of workers, not only by interpreting existing laws and using the office as a bullying chair, but also by directing employers who may not follow laws and to coordinate.
Joanne Goldstein, who has known Walsh for 15 years through various works by her, such as the head of the Fair Labor General Division of Massachusetts, and as the Secretary of Labor and Labor Development, said he cares most for workers who have access to social and economic affairs. safety nets.
“We had a number of situations in which he would approach me in my capacity to see what we could do in the context of the law to help workers get the wages, benefits, safety and training that employees deserve,” he said. Goldstein told CNN Business.
Reflection on the Trump administration’s position on independent contractors
Given the current economic downturn, the issue of worker classification may not be the first priority on Walsh’s list. But as Becki Smith, director of work structures at the National Employment Law Project, notes: “It is urgently necessary for them to be very clear about their interpretation of the law.”
“The first business industry is to erase Trump policies that have very drastically reinterpreted who of us gets access to basic legal protection,” Smith said. Much of that can be done administratively without changing federal law, Smith added.
The coalition backed by Uber, Lyft, DoorDash and Instacart wasted no time in making a statement on Inauguration Day to congratulate Biden and Harris as they pushed for its ‘modern policies’ agenda that workers ‘will provide access to benefits while protecting their flexibility. to earn independent income according to their schedule. ‘
To really make a mark on the matter, Walsh will have to take on “the entrenched people from Silicon Valley,” Erlich said. The group includes former Obama administration officials who are now in key roles at gig companies such as Lyft’s chief policy officer, Anthony Foxx, and Lyft’s board member Valerie Jarrett. Uber’s chief justice Tony West has served in the Justice Department for the Clinton administration and Obama and is Harris’ brother-in-law.
As Liss-Riordan, the Boston lawyer, put it: “This can be an extremely important position and there are a lot of people who are very hopeful of Marty doing what needs to be done.”