November 11, 2015
Companies Sued By Workers Want To Find A Way To Protect Them
by Caroline O’Donovan
An open letter was published today — on Medium, of course — that calling for a portable benefits system for workers. The letter was signed by a coalition of tech founders and CEOs, venture capitalists and funders, and non-profit and foundation executives, as well as a few representatives from the alternative labor movement.
The document argues that, in the face of a workforce that is increasingly likely to include self-employed individuals working for multiple entities, the U.S. needs to fundamentally reimagine how benefits — “such as workers compensation, unemployment insurance, paid time off, retirement savings, and training” — are distributed. Traditionally, it has been the responsibility of an employer to provide these programs. But today, the letter argues, considering the way digital platforms have fragmented the labor force, that system no longer makes the most sense.
The letter is supposed to demonstrate a sense of solidarity around the issue of benefits for gig workers, an issue that unites such strange bedfellows as labor organizations and San Francisco tech startups. The letter itself is relatively toothless; it doesn’t make specific policy recommendations, and so far it hasn’t been officially endorsed by any regulators. It does, however, confirm that issues of workers’ rights have a broad momentum right now. What the letter doesn’t address — and what may eventually divide those who signed it — is whether actually providing benefits to these workers ultimately falls to labor organizers or private entities.
Many of the companies that signed this document are the very same companies responsible for the fragmentation of the workforce in the first place. The founders of Lyft, which hires independent contractors to drive cars, signed it. So did the CEO of Handy, which dispatches contract workers to clean houses. The CEO of Instacart, which relies on a team of drivers and shoppers to deliver groceries to customers, is also on there. Partners from the venture capital firms that fund these companies (or those like them) — Homebrew, Greylock Partners, Union Square Ventures and Second Avenue Partners — also signed on.
And many, in fact, are being sued by workers who say they were misclassified as contractors and are owed compensation for the pay and benefits they thereby missed out on. (Note that this is not true of all signatories; the CEO of Etsy also signed, for example, and while that company does profit off the work of self-employed crafters, it’s not currently being sued by any.)