Gig Worker Law Written by California Firms Lacks Enforcement Action

MJP –

State agencies, worker interviews, and an examination of wage claims show that no one is making sure that the greater salaries and health benefits approved by California voters for ride-hailing drivers and delivery workers are being supplied. This is happening nearly four years after the approval.

When Proposition 22 was approved by the voters in November 2020, it mandated the benefits. The gig economy businesses who opposed a 2019 state law that would have treated their staff as employees and instead classed them as independent contractors supported the ballot issue. A proposal. 22, which called for better treatment of gig workers while yet allowing them to remain independent contractors.

A representative from the state’s Industrial Relations Department informed CalMatters that the agency lacks the authority to hear issues of Prop. 22, arguing that gig workers are not considered employees because the statute was maintained in a July 25 decision by the California Supreme Court. That means the state attorney general’s office will be in charge of enforcement instead, but they were vague when asked about their intentions, stating that they don’t decide on specific cases but do pursue large-scale lawbreakers.

Workers are left in a condition of uncertainty due to the absence of enforcement, even though they have often waited for the state to address their complaints for months or even years. There have been 54 claims filed by workers regarding Prop. 22 months since its implementation in 2020. According to state documents that CalMatters obtained, not only are at least 32 of them unresolved, but at least two of those are because staff failed to follow through.

A claim from 2021 is among the unsettled ones, along with a number from 2022 and 2023; around half of the claims are from this year, up to May.

Attached to the allegations are emails showing that beginning in 2022, the Industrial Relations Department informed seven workers—one of whom was a contractor—that it was drastically understaffed and lacked the authority to assist them because of their status as independent contractors rather than employees.

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Even though the amount of claims submitted with the state is small compared to the over 1 million gig workers in California, they do show what occurs when workers seek assistance from the state rather than the businesses who supported Prop. 22.

Claims and interviews with CalMatters show that workers are upset that rideshares like Uber, Lyft, and Instacart did not comply with the law’s requirements for higher salaries and health care stipends, and that representatives from these firms might be slow to respond or appear puzzled when workers ask them to do so. 22 advantages. Companies in the gig economy have praised the law, claiming it has increased wages and benefits and kept workers in the flexible gig economy.

Workers like Laura Robinson have had to take legal action to get what they think they’re legally entitled to. She has been battling two separate gig-work companies for various perks guaranteed under Prop. for the last year and has filed claims with the state. 22.

A vehicle doing a U-turn struck her and destroyed her car a year ago, she said, while she was delivering food for Instacart. According to her, she has been unable to make more than a handful of deliveries in the previous few months due to persistent back pain.

The Irvine resident Robinson sought to have Instacart comply with Prop. 65 by providing her with occupational accident insurance retroactively. 22.

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According to Robinson, “four or five different (representatives) told me on chat ‘we don’t provide insurance,’ but I told them this is California” when she initially contacted Instacart regarding the mishap. Robinson had trouble recording the incident because, according to her, the responding officer from the Torrance Police Department rode away on his motorbike without completing a report. “Oh yeah, I know what you’re talking about,” someone finally answered.

The insurance company Zurich, which covers Instacart, did not respond to her for around seven months. Bank papers and letters from Zurich to her show that she received a lump sum and monthly payments for the time she has been mostly unable to work, which she shared with CalMatters.

The app includes instructions on how to file claims, and all of Instacart’s shopper support workers should be aware of “shopper injury protection,” according to Instacart spokesperson Charlotte Healow. Although it took a few attempts, Robinson was able to get an email response on her issue after showing CalMatters many screenshots of her conversations with support agents who either mistook her question for one about health insurance or promised to do so.

Curri, a food delivery service, was a smaller gig platform that Robinson said she had also had trouble getting to comply with the legislation. Regarding Prop. According to her, Curri had not paid her the full minimum wage for the time she spent driving for ride-hailing and delivery gigs, which is twelve times the legal minimum. Because she was at a loss as to who to contact, she sought assistance from the attorney general’s office and other state agencies. She went so far as to file a formal complaint through the National Consumer Complaint Database of the Federal Motor Carrier Safety Administration.

A hearing was finally set for Aug. 29th by the Industrial Relations Department after many months of waiting. The department informed her last week that the corporation had decided to settle and pay her the amount it owed, as per emails and a release she signed and provided with CalMatters. After sending CalMatters to the company’s legal department, Curri’s director of marketing did not respond to three emails seeking comment.

Prop. had benefits that Robinson could see. 22, following its passage. Because of the law, she was able to increase her wages while still enjoying the flexibility of setting her own hours as a Grubhub delivery driver. However, her frustration has grown due to the difficulty in determining who is responsible for maintaining it.

The lack of enforcement or application renders it useless, she remarked.

The deputy labor commissioner with whom Robinson maintained contact while suing Curri allegedly informed her this week that due to Prop. Since the agency lacks authority over independent contractors, it would no longer be responsible for handling cases like 22 once the state Supreme Court upheld it, thereby guaranteeing that gig workers cannot be considered employees.

What are the grievances of gig workers?

This is the Prop. The 22 pay claims that CalMatters examined were among roughly 200 that gig workers submitted to the Industrial Relations Department after the rule went into effect in December 2020. Even though DoorDash is one of the largest app-based gig companies, the state did not produce any claims against it when CalMatters sought all wage claims involving gig companies in that timeframe, citing the California Public Records Act. That was left unexplained by a department official.

Claims for underpaid or delayed pay, including adjustments due under Prop., were filed by the majority of claimants. 22. One driver claimed he requested and did not get occupational accident insurance, while others sought health care stipends mandated by the gig-work statute.

The papers also explain in detail how app developers are supposedly withholding employees’ wages. Several gig workers asserted in these claims that they were deactivated, or terminated, from the app prior to receiving their full compensation.

Additionally, the documents show that the state has problems promptly enforcing accountability from app developers. Some employees made repeated requests for case updates and expressed dissatisfaction with the state’s lack of communication in emails pertaining to the allegations. According to an email response from a supervisor in the San Francisco office of the Industrial Relations Department on May 30, 2024, the state receives a wide variety of worker complaints, including those from gig workers. The supervisor also noted that there is a 40% staff deficit.

The agency has seven employees to deal with more over three thousand cases, the majority of which are older than yours. When asked whether this shortage is still an issue, the department did not provide a statement.

Claims for monetary wages varied between approximately $2 and roughly $420,000. The majority(54%) were opposed to Uber, the ride-hailing and delivery behemoth, while 25% were against Lyft, a rival of Uber’s. A total of seventeen claims were lodged against Instacart, a grocery delivery app; seven against Grubhub, a food delivery platform; four against Shipt, a delivery service owned by Target; and three against Roadie, a delivery service operated by UPS.

Gig workers’ wage issues have been addressed by the Industrial Relations Department for quite some time. On behalf of around 5,000 employees with wage claims extending back to 2017, the department’s Labor Standards Enforcement Division, headed by the labor commissioner, filed wage-theft lawsuits against Lyft and Uber in 2020. These cases are still pending.

It was before Prop. 22. The labor commissioner asserts in the wage theft lawsuits that the misclassification of gig workers occurred during a time when they should have been treated as employees according to California law. Following Prop. The statute was affirmed in July by the California Supreme Court, effectively declaring that drivers are independent contractors rather than employees after opponents challenged it and it went to trial.

According to Peter Melton, a department spokeswoman, the government is unable to process claims on underpaid health care stipends, missing earnings guarantee salary adjustments, or any other portion of the law as a result of the decision.

Even before Prop., department personnel had already told employees things along these lines. 22, according to the documents of the claims. The department informed an Uber driver via email on March 26, 2024, that “The Division of Labor Standards Enforcement enforces employment law.” So said the department. Earnings from Prop 22 cannot be enforced since they do not constitute ‘wages’ received by ‘workers.’

In some of the documents, this reflects the stance that Uber and Lyft’s attorneys adopted in response to wage disputes. In one email, they requested the state to reject the claims, explaining that drivers using Lyft’s platform are now considered independent contractors by law and cannot be sued under the Labor Code as of December 16, 2020.

Scott Kronland, a lawyer for SEIU California who fought unsuccessfully to have Prop. 108 overturned by the California Supreme Court. “I’ve also heard from drivers that they’re not getting the things they’re promised by Prop,” the 22-year-old told CalMatters. 22.”

After the ruling, Kronland said, they will have to go to the state’s Unfair Competition Law, which allows them to sue corporations for illegal business practices, and either local prosecutors or the attorney general can do it. “The Legislature could clarify enforcement,” he continued.

The attorney general’s office stated that gig workers can register complaints at oag.ca.gov/report in an unsigned email answer to CalMatters’ concerns following the state Supreme Court decision, including whether it intended to pursue Prop.-22-related lawsuits against gig-work businesses. According to the email, the Department of Justice (DOJ) files lawsuits against businesses that repeatedly violate the law, such as when they violate wage and hour standards on a large scale. However, the Attorney General’s office does not handle individual worker cases or resolve complaints through administrative hearings, comparable to the Department of Industrial Relations. We take seriously any reports or complaints of wrongdoing on the part of employers.

In response to a prior request by CalMatters for copies of wage complaints received by the attorney general’s office from gig workers, a spokesman for the agency stated that they were representing the state in their defense of Prop. 22nd appealed to the state’s highest court, which returned CalMatters to the Labor Relations division.

Facts that gig businesses reveal on Prop. 22’s influence

Workers are now making more than $30 per hour, according to gig businesses, thanks in part to the initiative’s earnings guarantee. While delivery drivers in California make an average of $5.93 per hour after expenditures (not including tips), ride-hailing drivers in the state earn an average of $7.12 per hour, according to a May research by the UC Berkeley Labor Center. Results showed that delivery workers made an average of $13.62 per hour after tips, while drivers made $9.09 per hour.

In order to comprehend the effects of Prop. On August 22nd, CalMatters sent the following questions to Uber, Lyft, DoorDash, and Instacart, the four biggest gig companies:

In what amounts have they paid to have each of Prop. promises made by 22:

Promise of one-hundredth of the minimum salary
Supplemental health insurance payments
Workplace accident coverage
Policy for the incorruptible
The number of gig workers who have gotten their promised benefits.

If they have increased prices for customers, how they have done so, and where those increased prices have been recorded in their public financial reports.

How they deal with concerns or complaints that pertain to their commitments.

Some eighty-five percent of Lyft drivers in California who have been with the firm since Prop. 22 have made it through at least one wage “top up”—the extra money drivers get under the earnings guarantee—until the conclusion of the fourth quarter of 2023. However, spokesperson Shadawn Reddick-Smith refused to give exact data regarding the number of Lyft drivers in the state. When asked about the status of the pay guarantee, not a single company would provide any details.

According to Healow, a representative for Instacart, the firm has provided health insurance subsidies totaling approximately $40 million to the tens of thousands of people who work as delivery drivers for the company across the state. In addition, she mentioned that since Prop., roughly 11% of California customers have been qualified for a health care stipend. 22 became effective, and 28 percent of the eligible consumers had used their subsidies.

Health care stipends are available to employees who meet certain requirements, including working 15 hours per week for three months straight and having health insurance that is not offered by their company or the government. Because gig businesses aren’t willing to say how many employees have gotten the stipends, CalMatters reached out to Covered California, the state’s health insurance exchange, to see if it had any information that could clarify the situation. According to a representative for the exchange, Jagdip Dhillon, 7% of the 1.6 million Covered California members who participated in the 2023 poll reported engaging in gig employment.

According to DoorDash spokesperson Parker Dorrough, during the fourth quarter of 2023, just 11% of qualified couriers took advantage of the health care stipend. However, 80% of DoorDash’s delivery workers were already covered by another source, like their spouse or full-time job.

When asked about the status of the stipend’s delivery, no other company would provide any details. Eighty percent of Lyft drivers in California already have health insurance, according to Reddick-Smith. Of those drivers, thirteen percent purchased their policy, making them eligible for the subsidy.

The percentage of employees who have utilized their occupational accident or accidental death insurance was not disclosed by any of the four companies.

Companies refused to explain their accounting practices for Prop fees. 22 expenditures, and the fees are not detailed in their publicly accessible financial reports. According to Instacart, clients are not charged for fees related to Prop. 22. An additional 75 cents is tacked on to Lyft’s per-ride service cost as a “California Driver Benefits Fee.” Similarly, Uber imposes a “CA Driver Benefits” tax on all rides and deliveries within the state, and according to spokesperson Zahid Arab, the firm has “invested more than we collected in fees.”

The rideshare company Uber “invested” over $1 billion in Prop in a blog post it released in response to CalMatters’ inquiries. 22 advantages. Arab would not go into additional detail about these advantages.

Each company has instructed employees to speak with support agents using the app if they have any issues with the promises; a representative from Instacart even mentioned that employees can submit claims through the app.

Last year, ride-hailing driver Sergio Avedian played a role in bringing attention to the absence of Prop. 22 enforcement officers. The statute required gig-work businesses to annually adjust the compensation they provide to drivers for mileage for inflation, and he zeroed down on that one specific issue. According to Avedian, no such change had occurred for two years in a row. And he was well-known for his podcasts and contributions to the Rideshare Guy, a prominent blog about gig employment. Due to the failure to publish the modified rates as required by Prop 22, Avedian and another vigilant motorist began to harass the state’s treasurer’s office. According to the Los Angeles Times, this was the last step in the process that put the state’s gig workers on the path to recover mileage expenditures, which could amount to hundreds of millions of dollars.

After a year, Avedian is now again interested in the mathematics of gig economy. Similar to what CalMatters did, he has questioned Uber about its accounting practices regarding the driver-benefits cost it adds to each trip or delivery. Just like before, the business didn’t give him much information in its response to him.

Avedian expressed his alarm “as a consumer who is paying into the Prop” in addition to his driver-related concerns. 22 dollars for each shipment; I’d want a receipt detailing exactly where my money is going.

During the time that the gig economy had their Prop. “Help create a better path forward for drivers.” they pleaded with voters on the 22nd.

Gig workers like Avedian in California claim, however, that their lives have remained mostly unchanged. Low salaries, a lack of company transparency, and inadequate worker rights are still common complaints.

According to Yasha Timenovich, he has been a ride-hailing driver for ten years, starting with Uber and continuing with Lyft.

Timenovich, a driver in the greater Los Angeles area, stated, “I work 12, 13, 14 hours a day.” He claimed he has to work long hours to attempt to earn enough money, but he doesn’t account for the time he sits and waits at LAX. “We aren’t working as entirely separate entities. No, we are not workers. We can be seen as a hybrid version of their model. We’re not exactly famous.

Additionally, he stated that he is ineligible for the health care stipend since he is required to enroll in Medi-Cal, California’s health insurance program for low-income individuals. He boasted that all the drivers he knows are on Medi-Cal due to financial constraints on health insurance. No one I know has received the stipend.

People who drive a lot supported Prop. 22, he declared. What was conveyed to us, however, was false.