Update May 2022: NoProp22MA is now Massachusetts is Not for Sale.
By Andrew Hunter
In November 2020, Californians working for Big Gig Companies (Uber, Lyft, InstaCart, Doordash) were reclassified, under state law, from “employee” to “independent contractor.” This reclassification came to be law through Proposition 22, a ballot initiative passed in the 2020 California state election, and lobbied for by those Gig Companies it affected. Throughout 2020, Big Gig contributed more than 205 million dollars (a state record) to the Yes on 22 campaign, which ultimately succeeded in its goal of passing the bill by popular vote. This Big Gig victory, however, was lessened in August, when the Alameda Superior Court of California determined Prop 22 to be unconstitutional. The court ruled that the proposition infringes upon the state authority to regulate compensation for worker injuries and the worker’s right to unionize. While the decision is likely to be appealed by Big Gig, the ruling was a victory for worker’s rights coalitions, and may curb the power grab that is Prop 22.
Big Gig has now moved the fight to Massachusetts, where it plans to pass a similar initiative, with the same reclassifications for gig employees. As it did in California, Big Gig is expected to funnel hundreds of millions of dollars into this Massachusetts agenda item. In November of 2022, Massachusetts citizens will vote on a similar ballot initiative that will determine the rights of app-based workers for the foreseeable future.
The paramount goal of the Massachusetts worker classification petition, known as the "Massachusetts App-Based Drivers as Contractors and Labor Policies Initiative (2022)," is to reclassify app-based workers as an “independent contractor,” and not an “employee.” This reclassification will, in the interest of Network Companies (app-based delivery and transportation corporations), re-determine the wages paid and benefits allocated to their app-based drivers. According to the petition filed, wages paid to app-based drivers should equal 120 percent of Massachusetts minimum wage (which would be $18 per hour in 2023), plus an inflation-adjusted vehicle-expense rate. These wages and reimbursements are determined using “engaged time,” which includes time “from when a driver accepts a request for delivery or transportation services to when the driver fulfills that request.” Data from Uber indicates that engaged time accounts for only 67% of a driver's working time, which means that drivers will not be paid for ~33% of their necessary working time between trips. While the petition language includes earned-paid sick time, healthcare stipends, medical and family leave, and occupational accident insurance, most app-based workers would not qualify for these benefits.
The Coalition to Protect Workers Rights (CPWR) adamantly opposes Big Gig’s attempt to pass Prop 22 in Massachusetts. Endorsed by dozens of progressive organizations, including Warren Democrats, Progressive Mass, and the Sierra Club, the coalition finds the initiative to be nothing more than an exploitation of representative democracy which uses corporate financing to advance the agenda of those few in power. It manipulates the public, abuses the legislative influence of corporate America, and seeks to bleed app-based workers dry. Pledging to “protect and expand worker rights, protect consumers, combat income inequality, and advance racial and economic justice,” the CPWR opposes Big Gig’s incursion on worker’s rights, on the pursuit of equality, and on the application of justice.
A most significant danger posed by Prop 22 is the elasticity of its language. The organization writing this language, the Massachusetts Coalition for Independent Work (MCIW), has a top contributor list made up of “DoorDash, Inc., Lyft, Inc., Maplebear Inc. d/b/a Instacart and Uber Technologies, Inc.”[1] Those industry contributors, which are expected to funnel more than 100 million dollars into the initiative over the next year, have explicit financial incentives in the passing of this bill.[2] They are expected to have worked closely alongside MCIW drafters in creating this language and are expected to have been integral in forming the policy’s content.
The initiative has been purposefully crafted to downplay the effect it would have on worker’s real wages, benefits, and rights:
The real wages paid to “independent contractors,” when considering the petition’s definition of “engaged and unengaged time,” its minimum reimbursement rates, its limited healthcare stipend, and its absence of payroll taxes, is 4.82 dollars per hour. This real wage is less than one-third of the Massachusetts minimum wage (15 dollars) and closer to one-quarter of the companies advertised wages (18 dollars). The following points are drawn from UC Berkeley’s labor center; their research concerns only Uber and Lyft data but is representative of the larger issue with Network Companies:
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33 percent of drivers' time is spent in unengaged time, unpaid. While an “employee” would make 60 dollars in four hours of work, an “independent contractor” makes less than 40 dollars.
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The minimum reimbursement rate per mile is 26 cents - 30 cents less than the IRS standard mileage rate. An employee who drives 20 miles (the average distance of Uber/Lyft drivers) would be reimbursed with more than 11 dollars; an “independent contractor” is reimbursed only 5.20 dollars.
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Healthcare stipends are available to only those “independent contractors” who work 15 hours per week, and who verify their insurance memberships. While an “employee” who works 15 hours per week, under the ACA Bronze Plan, would be stipended 340 dollars, an “independent contractor” would be given 68 dollars; 90 percent of drivers do not even qualify for this basal stipend.
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Because they are classified as “independent contractors,” Network Companies are not required, by law, to cover payroll taxes; drivers must cover their own employees' taxation and compensation bills. While an “employee” would receive company imbursed sick, parental, and vacation leave, along with unemployment benefits, the “independent contractor” is forced to cover every one of those costs, personally.[3]
After each statistic above is applied to the equation, the real wage of the average driver comes out to 4.82 dollars. Uber and Lyft issued a response to the UC Berkeley wage calculations, defending the logistical and moral ends of their policies. They do not, however, question the calculations and results that UC Berkeley has laid out. Uber and Lyft, and other Network Companies, would pay their Massachusetts drivers subminimum wages. In addition, Uber and Lyft, and other Network Companies, have engaged in misrepresentative advertising, by flaunting their ‘120 percent’ wage proclamation and promising equitable health benefits.
These policies not only threaten the livelihoods and futures of Network Company drivers, but also the larger sanctity of workers' rights. The 2022 Initiative, in its reclassification of the Massachusetts worker, would remove any state and federal mandate normally applied to an “employee.” No longer would Network Company drivers have the legal protection that an “employee” does to legal protection against “workplace injuries, sexual harassment, and discrimination.”[4] While the initiative does state that a company shall not discriminate based upon traditional standards, no rights are allocated to the individual, as an “employee,” under Massachusetts state law. The judicial precedent and oversight concerning employer-“independent contractor” affairs are not cemented into state legislation like employer-employee affairs are. This would allow for the exploitation of the worker by the employer.
This is an important conversation to be had. Approximately 51,000 workers in Massachusetts are contingent in their employment; approximately 55 million are contingent nationwide.[5] As the economy develops over the next decades, these numbers are likely to increase. How we protect those workers now will determine their security not only over the next few years, but over the foreseeable future, and not only in California and Massachusetts but across the nation and world.
You can support the Coalition to Protect Workers Rights in their opposition to Prop 22, and the larger goal of social and economic equity.
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Tell your family and friends about the NoProp22MA ballot measure and the effects such an initiative would have on its contingent worker population.
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Email your legislator, and those on the Joint Committee on Financial Services to tell them to oppose bill H.1234, which is being used by Big Gig as a companion measure to remove worker protections.
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Vote! Your voice and vote will make a difference in the upcoming November 2022 elections, where the Prop 22 petition will appear as a ballot question.
[1] https://independentmass.org/about-the-ballot-question/
[2] https://noprop22ma.com/our-fight/
[3] https://laborcenter.berkeley.edu/mass-uber-lyft-ballot-proposition-would-create-subminimum-wage/
[4] https://noprop22ma.com/our-fight/
[5] https://pdcboston.org/ezine/how-big-is-the-gig-economyin-massachusetts/
Andrew Hunter is a Sierra Club volunteer, and 3rd-semester student at Boston University.