What Happened in California Is a Cautionary Tale for Us All

A voter-approved measure strips gig workers of basic protections enjoyed by employees in other businesses.

What happened in California? Despite the state’s liberal reputation, voters there last week approved Proposition 22, a ballot initiative exempting many gig companies from state workplace laws and stripping their workers of basic, essential protections.

Uber, Instacart, Lyft, DoorDash and other on-demand providers of ride-shares and food and grocery deliveries spent $200 million pushing the proposal, an astounding sum that workers and their allies couldn’t remotely hope to match. Not surprisingly, Californians were misled by an avalanche of claims about the proposal’s impact on workers. The measure, which takes effect next month, was approved with 58 percent of the vote.

Emboldened by the results in California, Uber and friends are apparently planning to take the show on the road. Potential targets could include Massachusetts or New Jersey, where state regulators have pursued them, or New York or Pennsylvania, where courts have rejected the argument by gig companies that workers run their own independent businesses. The rest of us need to understand what happened in California.

What was at stake with Proposition 22 was whether workers for app-based driver and delivery companies would be considered employees under California statutes, which like workplace laws nationwide, cover only employees, or whether they should be classified as independent contractors. Proponents argued that requiring gig companies to follow current laws would badly damage their on-demand business model and result in longer wait times, higher prices and the loss of countless jobs. These were the same bleak prognostications gig companies made about the minimum wage for drivers that New York City enacted two years ago — predictions that did not come to pass.

What they didn’t say was that it was a terrible deal for workers. Allowing companies to write their own exemption from California law is also a cautionary tale for our fragile democracy.

Now, workers for these gig companies in California will not have a right, as employees do under state law, to paid sick days, overtime pay, unemployment insurance or a workplace covered by occupational safety and health laws.

How did these companies persuade California voters to approve this snatching of rights from thousands of vulnerable people? They used a deluge of money to convince voters that the proposal served workers’ interests by preserving their flexibility, ensuring a guaranteed level of pay and providing them with “portable” benefits.

Their claims were deceptive.

There’s no law prohibiting flexible or part-time hours for employees. Millions of employees already work part-time or flexible hours. Indeed, these particular industries (ride-share and food delivery) would be unlikely to hire only full-time employees because of the ebb and flow of customer demand.

Under Proposition 22, gig companies will have to pay their contractors 120 percent of the state or local minimum wage. In addition, companies must pay 30 cents per mile for gas and other vehicle-related expenses, adjusted annually for inflation.

But here’s the catch: Workers will be paid only for “engaged time,” defined as the time between receiving a request and dropping off the passenger. This is far less than what’s required under laws for employees, who must be compensated for all work time. About a third of drivers’ work time wouldn’t fall within this definition of “engaged time,” according to a study funded by the companies themselves. Workers will not be paid for time spent getting gas, waiting for a ride request or cleaning and sanitizing their cars.

Plus, 30 cents per mile doesn’t cover all vehicle-related expenses; by comparison, the Internal Revenue Service’s optional standard deductible rate for the costs of operating a car for business is 57.5 cents per mile. And as independent contractors, drivers won’t have a right to overtime pay for long workweeks, as is required for employees. In light of all this, a study by three research groups at the University of California, Berkeley, found that Uber and Lyft drivers would be guaranteed only an estimated $5.64 per hour. This no doubt would have surprised 40 percent of those in a survey of early voters who said they had supported Proposition 22 to ensure workers earned livable wages.

Finally there is the issue of benefits. Gig companies have used snazzy “portable” benefits language, but Proposition 22 gives workers crumbs compared to what it takes away. Companies must provide a “health care subsidy” to people working at least 15 hours of “engaged time.” At 30 weekly hours, the subsidy would average about $1.22 per hour, or just over $36.00 a week, according to one analysis, a paltry sum compared with what workers would receive as employees who are paid for all of their work time — not just two-thirds of it.

And of course, rights are meaningful only if they are enforceable. If a company pays less than what’s required, shaves hours or doesn’t pay the health care subsidy, Proposition 22 is silent about what mechanism workers can use to enforce those pay and subsidy rights.

The kicker? Unlike most laws, which require only a majority vote of the State Legislature to revise, Proposition 22 requires the vote of seven-eighths of the Legislature to make any changes.

These are the truths that can be buried by well-funded advertising campaigns of large corporations collaborating to write their own rules. And this, in the end, is what’s most dangerous about Proposition 22. Companies shouldn’t be able to do this. Surely, lots of other industries would like to avoid paying unemployment insurance taxes, sick days or overtime. Surely, food manufacturers would like an exemption from safety requirements and inspections, and chemical companies would save a bundle if they got an exemption from environmental laws.

But that’s not how our system is supposed to work.

California has always been a bellwether. This time, let’s not follow its lead.

California Tenants Take Rent Control Fight to the Ballot Box

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LOS ANGELES — From pulpits across Los Angeles, Pastor Kelvin Sauls has spent the past few months delivering sermons on the spiritual benefits of fasting. The food in the sermon is rent, and landlords need less of it. “My role is to bring a moral perspective to what we are dealing with around the housing crisis,” Pastor Sauls explained.

In addition to a Sunday lesson, this is an Election Day pitch. Pastor Sauls is part of the campaign for Proposition 10, a ballot initiative that would loosen state restraints on local rent control laws. The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.

Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.

The initiative drive builds on the growing momentum of local efforts to expand tenant protections. “In the midst of the worst housing and homeless crisis that our country has ever seen, how does a bill that restricts local government’s ability to address it go untouched?” asked Damien Goodmon, director of the Yes on 10 campaign, which is primarily funded by the AIDS Healthcare Foundation in Los Angeles.

Proposition 10 has won prominent endorsements from backers including the California Democratic Party and The Los Angeles Times. But opponents have also amassed editorials and broad support, mainly from a coalition of construction unions, nonprofit housing developers and local chambers of commerce.

Among those fighting the initiative is a relatively recent class of landlords — private equity firms like Blackstone Group, which accumulated a vast residential real estate portfolio after the housing market collapse a decade ago. Landlords warn that repealing the Costa-Hawkins law would create deep uncertainty among developers, making California’s housing shortage worse by discouraging construction.

“This is a serious problem, but the solution to that problem should not land solely on the rental housing industry,” said Tom Bannon, president of the California Apartment Association, a landlords’ group.

The California fight reflects a renters’ rights movement that is bubbling up in churches and community centers across the country, a semi-coordinated stand of low-income tenants against the gentrifying American city. Last month in the Roxbury section of Boston, about 300 people gathered for an afternoon assembly on how to blunt evictions and economic displacement. The event offered free child care and had organizers speaking English, Spanish and Cantonese.

California Death penalty repeal dead: Prop. 34

(11-07) 05:09 PST SACRAMENTO — Proposition 34, an initiative to repeal California’s seldom-used but politically potent death penalty law, looked dead with nearly 95 percent of the votes counted Wednesday. The measure would reduce the maximum sentence for capital murder to life in prison without the possibility of parole and would apply retroactively to the more than 720 condemned inmates on the nation’s largest death row. It was the first statewide vote on the issue since 1978, when a 71 percent majority approved expansion of a death penalty law that legislators had passed the previous year over Gov. Jerry Brown‘s veto. That campaign focused on whether murderers deserved to be executed. The Prop. 34 campaign, by contrast, stressed the financial costs of the state’s death penalty – $184 million a year, according to one study – and the structural paralysis of its system. Since executions resumed in the state in 1992, only 13 inmates have been put to death. Executions have been on hold in California since 2006, when a federal judge ordered the state to improve staff training and procedures for lethal injections. The injunction has granted a reprieve to more than a dozen prisoners who have no further appeals. Read more: http://www.sfgate.com/politics/article/Death-penalty-repeal-dead-4014666.php#ixzz2BY8ZH0V3

Prop. 36: ‘Three strikes’ changes approved

California voters overwhelmingly approved changes to the state’s tough “three strikes” law on Tuesday, ending a practice in which prosecutors could seek 25-years-to-life sentences for defendants even if their latest offense – their third strike – was neither serious nor violent. The law, approved by state voters in 2004, aimed to lock up career criminals like Richard Allen Davis, who a year earlier had kidnapped and murdered 12-year-old Polly Klaas of Petaluma after an earlier string of assaults, robberies and abductions. But the law came under criticism when lesser offenders – a man who stole a truck and two bikes at Stanford, for instance, and another who stole a pepperoni pizza in Southern California – got 25-years-to-life sentences. The change in the law will allow an estimated 2,800 third-strike inmates currently in prison to petition the courts for a reduced sentence, according to the nonpartisan Legislative Analyst’s Office, and prevent an untold number of people from being charged with a third strike in the future. Proponents said Prop. 36 restored voters’ original intent: to lock up the worst serial criminals. San Francisco District Attorney George Gascón, a co-chair of the Prop. 36 campaign, said the measure’s passage would not only save money and allow nonviolent offenders to avoid spending the rest of their lives in prison, but also change the conversation in California.

With its passage, voters sent “a strong message to policymakers about what is considered acceptable to maintain public safety,” he said.

Read more: http://www.sfgate.com/politics/article/Prop-36-Three-strikes-changes-approved-4014677.php#ixzz2BY56W3G2