Republicans introduce bill to create legal ‘safe harbor’ for gig companies during the pandemic

Republicans in both chambers introduced legislation Wednesday that would shield digital gig companies from lawsuits over worker classification when providing protective equipment or wage boosts during the coronavirus pandemic.

The Helping Gig Economy Workers Act establishes protections that have long been advocated for by gig companies such as Uber, Lyft and Instacart at a time when pressure for them to classify their workers as full employees has intensified.

The bill was introduced by Sens. Mike Braun (R-Ind.) and Kelly Loeffler (R-Ga.) in the Senate and Rep. Carol Miller (R-W.Va.) in the House.

“As Main Street Entrepreneur who has created hundreds of permanent jobs and have hired temporary contract workers, I know this legislation will let businesses like Uber, Lyft, and others provide COVID-19 assistance through financial assistance, cleaning materials, hand sanitizer, and other goods without being penalized for their goodwill,” Braun said in a statement.

“Bottom line: this commonsense bill will provide a safe harbor for businesses who want to help gig economy workers helping us during COVID-19,” he added.

The protections would be in place until June 30, 2021, or until the current public health emergency is deemed to be over by officials.

Digital gig companies have exploded in popularity over the last decade, all while classifying those who use the platforms for work as independent contractors who are not guaranteed basic protections such as a minimum wage or a right to organize.

During the pandemic, some of those companies have argued that they can’t provide extra benefits or protections for workers without fearing that doing so would be used as evidence in a legal dispute over classification.

Shannon Liss-Riordan, a labor attorney who has sued Uber and Lyft over misclassification, told The Hill on Wednesday that the bill is unnecessary because providing benefits or protections “is not relevant to whether the workers are properly classified as employees or independent contractors.”

“Under federal law and in most states, the issue turns on a number of factors, most notably right of control,” she said. “Under laws of some states, including Massachusetts and now California, the issue turns on what type of business the company is engaged in — and whether the workers provide services within the company’s usual course of business.”

The California law that Liss-Riordan referred to is AB 5, which requires a company to classify its workers as full employees if the firm has control over how they perform tasks or if the tasks are a routine part of the company’s core business.

Digital gig companies have resisted that law, often claiming that their core business is the platform itself, not the service it facilitates.

California Attorney General Xavier Becerra (D) and a group of city attorneys filed a lawsuit against Uber and Lyft earlier this month seeking to compel the ride-hailing giants to classify drivers as full employees, demanding civil penalties and restitution for drivers.

Braun’s office told The Hill that Uber and Lyft as well as food delivery company Postmates and grocery delivery company Instacart were consulted during the drafting of the legislation.

According to Brian Chen, a staff attorney at the National Employment Law Project, the legislation is an attempt by those companies to “shut the door on misclassification litigation and enforcement.”

“They lobbied intensely for this bill, and if passed, it would have disastrous consequences for workers’ ability to access their full rights under the law,” he told The Hill.

“This bill is a craven attempt by the app companies to escape their employer obligations during a global pandemic. This ‘safe harbor’ will give shelter only to the app companies and their shareholders, while low-wage workers, honest businesses, and the public will suffer,” he added.