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On Thursday morning, more than $ 15 billion was removed from the value of the largest U.S. companies with concert economy, after the U.S. secretary of labor suggested some workers should be classified as employees.
Shares of pioneer Uber and Lyft and food delivery service DoorDash fell 5 to 11 percent after Marty Walsh told Reuters he felt workers should be treated as employees in “many cases.” .
“In some cases [workers] they are treated respectfully and in some cases they are not, “he told the news agency.” And I think it has to be consistent in all areas. “
Investors took the comments, from the head of a department with considerable influence on the interpretation of U.S. labor law, as a significant threat to companies whose business models are based on the controversial status of ” independent contractor “of the workers. This allows key costs, such as fuel and maintenance, to be passed on to the worker and usually lead to less protection and benefits.
“These companies make profits and income and I don’t [going to] don’t fool anyone into making this what we are in the United States. . . but we also want to make sure success happens to the worker, ”Walsh said.
I was planning meetings with concert economy companies in the coming months to discuss the issue, Reuters reported.
“Uber believes we should move forward on policies to improve self-employment, not eliminate it altogether,” the shared travel group said after communicating Walsh’s comments.
“But what we think is more important than what we think. Survey after survey shows that the vast majority of application-based workers want to stay independent, as it allows them to work when, where and how they want with a flexibility that no traditional job can match. ”
Elizabeth Jarvis-Shean, head of policy at DoorDash, said her drivers (whom she calls Dashers) worked an average of only four hours a week, and called for a debate on “modern policies” around work.
“Dashers have told us overwhelmingly that they value the flexibility to win when and how they choose,” he said.
Lyft did not return any requests for comment.
The Wages and Hours Division of the Department of Labor is responsible for applying national criteria on whether workers are self-employed or contractors. The Trump administration tried to apply a looser interpretation of the criteria, but the Walsh Department of Labor has proposed rescinding the changes and is waiting Approval of the White House.
Concert companies have aggressively fought more localized efforts to achieve reclassification, especially in California. Companies have warned that changing the model to classify workers as employees would mean higher prices for customers and less and less flexible jobs for drivers. They argue, that workers should adhere to shift patterns instead of the current ad hoc login for jobs.
Uber, both in the U.S. and abroad, has pushed for what it defines as a “third way” of employment that rests between formal employee status and the less stable independent contractor agreement. In the UK, the country’s highest court forced Uber to reclassify its drivers as “workers”, a UK-specific designation that offers some benefits, such as holiday pay and pension.
The U.S. Bureau of Labor Statistics estimated in 2017 that there were more than 55 million workers in the United States, a number that is expected to have increased considerably since then.
During the pandemic, when the demand for some concert worker services plummeted, many workers resorted to emergency programs specially crafted by the government to come to an end.
“If the federal government did not cover workers in the concerted economy,” Walsh added, “these workers would not only have lost their jobs, but would not have had any benefits to stop their family…”[and]we would have a much more difficult situation across the country. “
Walsh’s comments are the latest signal that the Biden administration intends to prioritize the issue of workers’ rights. During a address to Congress on Wednesday, President Joe Biden reiterated his support for the trade union movement, saying, “The middle class built this country. And the unions build the middle class.”
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