Worker Classification Rules Politics – NY State of Play

 

Worker Classification Rules Politics –

NY State of Play

 

As California’s legislature prepares to vote on AB5, the issue is making its way to New York. For years, there has been ever-rising tension in New York’s business and labor community about how to tackle worker classification in the gig economy.

The AFL-CIO led an effort at the end of this year’s legislative session that would have required the Department of Labor (DOL) to study worker classification issues, while putting a thumb on the scale in favor of providing gig economy workers the right to organize.  The backlash to the proposal was swift and broad. New York’s most progressive labor union, 32BJ, publicly slammed the proposal, as did a number of liberal labor economists. Even Tech:NYC called the effort “bullshit” (although that was most likely because at that point they were still opposing any worker classification regulation at all). Given the divisiveness of the proposal—and the fact that the bill was proposed in the closing days of session—the bill immediately died.

Less than three months later, a nascent coalition of the hyper-progressive groups, including 32BJ, Make the Road, the Taxi Workers Alliance, Legal Aid, and others, announced that they would soon propose and campaign for a much more far-reaching proposal that mirrored California’s AB5. There is not yet any language to review or bill sponsors to negotiate with, but make no mistake: if (in reality, when) California passes AB5, there will be enormous pressure on New York’s Democratically controlled legislature and Governor Cuomo to follow suit during next year’s legislative session. So, given the size and significance of the New York market, and given that the playbook used in California clearly won’t work in New York, what should sharing economy companies do?

First, keep these dynamics in mind:

  • Labor is divided on the right approach. The AFL-CIO favors a more incremental approach to reclassifying gig economy workers. Their top priority is giving these workers the right organize (and join a union) over all else. 32BJ, on the other hand, wants to immediately reclassify as many of these workers into employees and then, over time, organize them and turn them into union members. As the number of private sector union members continues to decline, organizing sharing economy workers may represent the best growth opportunity for labor, so this is an existential fight for them.

  • This is strikingly similar to the dynamic that emerged during the “Fight for 15” (a $15 minimum wage) in New York several years ago. During that fight, more traditional labor unions wanted to stay on the sidelines, arguing to sister unions that the labor movement should push workers to win higher wages through collective bargaining rather than through the legislative process.  

    However, more activist unions, including 32BJ, ultimately forced organized labor to unite behind a legislative campaign. Their rationale was that a successful political fight would help win the hearts and minds of workers that they could later organize. The second (and most critical) piece of that strategy is now beginning to play out across the country, as labor tries to organize fast food workers.

    It is no coincidence that the same union whose grand strategy is being tested is now trying to jumpstart recruitment for a new campaign that uses the same playbook. An AB5 type legislative victory in New York helps them hedge their bets by focusing most observers on a bright and shiny object, while distracting them from the difficulty they’re having actually organizing workers who won the $15 minimum wage.

  • State Senator Diane Savino (D-Staten Island), a longtime friend of organized labor, is chairing a hearing on worker classification on September 16th. Her goal is to hear from all sides and help move the debate along, not advance a preordained outcome. We believe there will be a genuine opportunity for platforms to persuade decision makers and the media at this hearing if—and only if—they rally behind a strong, unified message. To be clear, that message cannot just be “support innovation” or “jobs, jobs, jobs”. The techlash has wiped away the political glitter of new innovation and the jobs message that resonates in Trump country does not hold the same allure in progressive state capitals. It’s going to take real, thoughtful policies like portable benefits, opportunity to organize/ card check, partnering with guilds as well as some of the good but too last minute ideas promoted by Uber, Lyft and others in California.

  • Regardless of which political faction wins out in Albany, there will be a meaningful change to worker classification rules or to the way DOL studies these issues. There is simply too much political momentum to stop it from happening. For that reason, “just say no” or “just hire lobbyists, run tv ads and hand out campaign donations” will not be a winning strategy for any platform (if you think we’re wrong, just look at the real estate industry, which was absolutely decimated during the last legislative session).

 Second, when planning the fight, make sure you do the following:

  • You really need to understand the politics on the ground. Even when Amazon had 25,000 new, good paying jobs and billions in direct and indirect long-term tax revenue to offer New York, they failed to do their due diligence, found themselves in a maelstrom of local political opposition, got their messaging and tactics wrong at every turn, and found themselves forced to abandon ship. If you don’t want that to happen to you, you need to really understand all of the following:

    • What are the political forces that move legislation, money and opinion in New York? Who matters specifically and why? Who matters in labor, who matters in community activism, whose endorsements matter? Have the traditional business lobbying groups kept up with the times and run campaigns with the same sophistication as the progressive movement? Do the county machines have any relevance here? Asking these questions is necessary for every state that will take up worker classification and while we New Yorkers like to think we’re unique and special, all politics is local and every single jurisdiction is idiosyncratic.

    • How politically relevant are each of the entities pushing the legislation? How much money do they give to candidates? To whom and when? Do they have a ground game? How much do they drive public opinion? What about them inspires fear in politicians? How much will potentially changing the primary date for the 2020 state legislative elections impact their thinking? What new forces  can be brought to bear that would matter (like new uses of technology to mobilize and turn out voters in their next primary)?

    • What forces can you command – what pressure can you bring to bear – that matters politically in that jurisdiction? How do you go beyond the arguments that make sense to CEOs and investors and translate those into messaging that matters in a totally different arena?

    • You can’t just check the boxes. Simply hiring a lobbyist and thinking they’ll take care of you is like buying a few ads on Facebook and not understanding why you can’t acquire new customers. The days where knowing a guy who knows a guy are long gone (and if you’re on a call where someone tells you otherwise, assume the FBI is on the other end of the line). Politics today is based on a wide array of inputs: social media, earned media, paid media, grassroots, opposition research, polling, and, yes, lobbying. But just hiring your own lobbyists or aligning with the local groups who advocate for business means little if you can’t conduct modern political warfare. It’s rare that the political organizations representing business are as sophisticated as their opponents in labor and community activism. Just like you need to understand the politics on the ground of every jurisdiction, you need to understand which approaches will work in Albany and why (same with every other jurisdiction too) – and then dedicate the talent, resources and courage to execute each tactic relentlessly.

  • You can’t rely on the traditional arguments. Maybe screaming “jobs” works in a GOP presidential primary in the rust belt, but it’s not going to save you in a Democratically controlled, left wing state legislature. You need to put a human face on your arguments and you can’t wait until the bill is halfway through committee before you get started. You need to be proactive with new policy proposals like portable benefits and the ability to organize before the last minute. You have to understand the fundamental arguments that work for the other side and have a way to address and pre-empt them. You need to be able to show how your plan benefits workers more than simply reclassifying everyone as full-time employees. If it’s just about what’s good for you, no one cares.

    In other words, you can’t repeat the playbook used in California (it didn’t work). Even if all the platforms cannot unite behind a single proposal, those that effectively advocate for an evidence-based proposal—by mobilizing regular New Yorkers, workers, and the business community—will be best positioned to make sure the classification changes are reasonable and workable.

Finally, and perhaps most importantly, know what you don’t know. There’s a lot at stake here – the livelihood of hundreds of thousands of workers, the convenience and options of millions of customers, and the impact of billions of dollars in shareholder value. Take the time to get it right, invest the resources, don’t make the mistake of confusing intelligence or pedigree with political acumen, and recognize that this issue is going to change and evolve daily, and your strategy and gameplan has to evolve with it.

Bradley Tusk