https://www.nytimes.com/2023/03/13/business/prop-22-upheld-california.html

California Court Mostly Upholds Prop. 22 in Win for Uber and Other Gig Companies

The decision lessens the chances that gig drivers will be considered employees in the state, but it is expected to be appealed to the state Supreme Court.

By Kellen Browning

Kellen Browning writes about the gig economy and its workers.

• March 13, 2023

A California appeals court said on Monday that Proposition 22, the ballot measure passed by state voters in 2020 that classified Uber and Lyft drivers as independent contractors rather than as employees, should remain state law.

The decision by three appeals court judges overturned the ruling last year by a California Superior Court judge, who said the proposition was “unenforceable.” It was a victory for companies like Uber, which use gig drivers to transport passengers and deliver food, but do not pay costs that an employer would have to. Those costs can include drivers’ unemployment insurance, health insurance and business expenses.

Still, the appeals court ruling was not the final say. The Service Employees International Union, which, along with several drivers, filed a lawsuit challenging Proposition 22 in early 2021, is expected to appeal the decision to the California Supreme Court, which would then have several months to decide whether to hear the case.

The judges overruled Frank Roesch, the lower court judge whose decision to throw out the proposition in August 2021 set the stage for a protracted, high-stakes legal battle that will determine the job status of hundreds of thousands of California drivers.

The opponents of the proposition argued that the ballot measure was unconstitutional under several grounds. It set limits on the State Legislature’s ability to oversee workers’ compensation for gig drivers. It included a rule restricting them from collective bargaining that critics said was unrelated to the rest of the measure, and it set a seven-eighths majority vote of the Legislature as the bar for passing amendments to the measure related to collective bargaining — a requirement that was considered nearly impossible to achieve.

The three court of appeals judges, who heard oral arguments in the case in December in San Francisco, disagreed on two of the three points, but agreed that requiring collective bargaining to occur through an amendment to the proposition “violates separation of powers principles,” and ordered that clause to be severed from the rest of the ballot measure.

“The proper remedy,” the judges wrote, is to sever that section and “allow the rest of Proposition 22 to remain in effect, as voters indicated they wished.”

Tony West, Uber’s chief legal officer, said in a statement that the ruling was a “victory for app-based workers and the millions of Californians who voted for Prop 22.” He added that he was “pleased that the court respected the will of the people.”

The Protect App-Based Drivers and Services coalition, an industry group, said the ruling upheld the policy of protecting “the independent-contractor status of app-based drivers in California, while providing drivers with new benefits.” Lyft and DoorDash also issued statements calling the ruling a victory for drivers and voters.

The Service Employees International Union condemned the decision.

“Every California voter should be concerned about corporations’ growing influence in our democracy and their ability to spend millions of dollars to deceive voters and buy themselves laws,” David Huerta, the president of S.E.I.U. California, said in a statement.

Jon Streeter, one of the three appeals court judges, disagreed with large parts of the 63-page ruling of his colleagues, Tracie Brown and Stuart Pollak. In a 64-page dissent, Justice Streeter wrote that all of Proposition 22 should be thrown out, in large part because of its clause limiting the legislature’s authority over workers’ compensation for gig drivers.

“I would affirm the judgment, but I prefer to go further. I believe we must invalidate Proposition 22 in its entirety,” Justice Streeter wrote. He added that the definition of independent contractors used in the measure was “constitutionally infirm.”

Uber and other companies have long argued that drivers value the flexibility of being an independent contractor without set hours from an employer, and say they would have to give up that freedom if they were made employees. Labor activists reply that drivers are exploited, deserve better health care and employment benefits and could maintain their flexibility under a traditional employment model.

Gig companies spent more than $200 million pushing for Proposition 22, which gave gig workers limited benefits but exempted them from Assembly Bill 5, a law passed by the California Legislature in 2019 that set a new standard for determining whether workers should be considered employees under the law.

If A.B. 5, which is facing its own legal challenge, is ever applied to gig drivers, Uber and other companies could be found to be improperly treating those drivers as independent contractors rather than as employees.

As a result, gig companies would have to adjust their business models at the cost of several hundred million dollars per year, either by giving drivers further independence or — more likely — converting some number of them into employees, possibly of a third-party vehicle fleet operator that would use Uber’s and Lyft’s platforms.

Uber has used that model in parts of Europe and has considered using it in California. Uber and Lyft have said they would need to pause their operations in California for some length of time while they switched to that model.

In a blog post in December, Alison Stein, a senior economist at Uber, laid out a scenario of “forced reclassification” that would be devastating for the company’s business. She wrote that drivers would have to work set shifts, the service’s prices and wait times would surge, the company would reduce service in smaller cities and only about a quarter of current drivers would be hired full-time as employees.

Those arguments are misleading, said Veena Dubal, a professor at the University of California College of the Law, San Francisco. She has said that drivers deserve to be treated as employees.

“Nothing about employment status restricts flexibility,” Ms. Dubal said, adding that raising prices is a “business decision, not a necessary consequence of the law.” She said many drivers worked for the platforms only rarely, so implying that a vast majority of drivers would have to find new work was deceptive.

“The oligarchs are dancing in the streets tonight,” Ms. Dubal wrote on Twitter after Monday’s ruling.

But the legal battle is far from over. Even though the California Supreme Court does not take up every case that is appealed to it, legal experts said they expected it to do so in this instance.

“It’s very hard to imagine them passing on a case of this importance,” said Seth Harris, a law and policy professor at Northeastern University who has studied gig drivers’ employment status.

Kellen Browning is a technology reporter in San Francisco, where he covers the gig economy, the video game industry and general tech news. @kellen_browning

 https://www.nytimes.com/2023/03/06/business/economy/managers-overtime-pay.html

You’re Now a ‘Manager.’ Forget About Overtime Pay.

New evidence shows that many employers are mislabeling rank-and-file workers as managers to avoid paying them overtime.

Tiffany Palliser estimates that she worked at least 50 hours a week on average at Panera Bread, but she says she never received overtime pay.Credit...Scott McIntyre for The New York Times

By Noam Scheiber

March 6, 2023

For four years beginning in 2014, Tiffany Palliser worked at Panera Bread in South Florida, making salads and operating the register for shifts that began at 5 a.m. and often ran late into the afternoon.

Ms. Palliser estimates that she worked at least 50 hours a week on average. But she says she did not receive overtime pay.

The reason? Panera officially considered her a manager and paid her an annual salary rather than on an hourly basis. Ms. Palliser said she was often told that “this is what you signed up for” by becoming an assistant manager.

Federal law requires employers to pay time-and-a-half overtime to hourly workers after 40 hours, and to most salaried workers whose salary is below a certain amount, currently about $35,500 a year. Companies need not pay overtime to salaried employees who make above that amount if they are bona fide managers.

Many employers say managers who earn relatively modest salaries have genuine responsibility and opportunities to advance. The National Retail Federation, a trade group, has written that such management positions are “key steps on the ladder of professional success, especially for many individuals who do not have college degrees.”

But according to a recent paper by three academics, Lauren Cohen, Umit Gurun and N. Bugra Ozel, many companies provide salaries just above the federal cutoff to frontline workers and mislabel them as managers to deny them overtime.

Because the legal definition of a manager is vague and little known — the employee’s “primary” job must be management, and the employee must have real authority — the mislabeled managers find it hard to push back, even if they mostly do grunt work.

The paper found that from 2010 to 2018, manager titles in a large database of job postings were nearly five times as common among workers who were at the federal salary cutoff for mandatory overtime or just above it as they were among workers just below the cutoff.

“To believe this would happen without this kind of gaming going on is ridiculous,” Dr. Cohen, a Harvard Business School professor, said in an interview.

Dr. Cohen and his co-authors, professors at the University of Texas at Dallas, estimate that the practice of mislabeling workers as managers to deny them overtime, which often relies on dubious-sounding titles like “lead reservationist” and “food cart manager,” cost the workers about $4 billion per year, or more than $3,000 per mislabeled employee.

And the practice appears to be on the rise: Dr. Cohen said the number of jobs with dubious-sounding managerial titles grew over the period he and his co-authors studied.

Federal data appear to underscore the trend, showing that the number of managers in the labor force increased more than 25 percent from 2010 to 2019, while the overall number of workers grew roughly half that percentage.

From 2019 to 2021, the work force shrank by millions while the number of managers did not budge. Lawyers representing workers said they suspected that businesses mislabeled employees as managers even more often during the pandemic to save on overtime while they were short-handed.

“There were shortages of people who had kids at home,” said Catherine Ruckelshaus, the general counsel of the National Employment Law Project, a worker advocacy group. “I’m sure that elevated the stakes.”

But Ed Egee, a vice president at the National Retail Federation, argued that labor shortages most likely cut the other way, giving low-level managers the leverage to negotiate more favorable pay, benefits and schedules. “I would almost say there’s never been a time when those workers are more empowered,” he said. (Pay for all workers grew much faster than pay for managers from 2019 to 2021, though pay for managers grew slightly faster last year.)

Experts say the denial of overtime pay is part of a broader strategy to drive down labor costs in recent decades by staffing stores with as few workers as possible. If a worker calls in sick, or more customers turn up than expected, the misclassified manager is often asked to perform the duties of a rank-and-file worker without additional cost to the employer.

“This allows them to make sure they’re not staffing any more than they need to,” said Deirdre Aaron, a former Labor Department lawyer who has litigated numerous overtime cases in private practice. “They have assistant managers there who can pick up the slack.”

Ms. Palliser said that her normal shift at Panera ran from 5 a.m. to 2 p.m., but that she was often called in to help close the store when it was short-staffed. If an employee did not show up for an afternoon shift, she typically had to stay late to cover.

“I would say, ‘My kids get out of school at 2. I have to go pick them up, I can’t keep doing this,’” said Ms. Palliser, who made from about $32,000 to $40,000 a year as an assistant manager. She said her husband later quit his job to help with their child-care responsibilities.

She won a portion of a multimillion-dollar settlement under a lawsuit accusing a Panera franchisee, Covelli Enterprises, of failing to pay overtime to hundreds of assistant managers. Panera and representatives of the franchise did not respond to requests for comment.

Gassan Marzuq, who earned a salary of around $40,000 a year as the manager of a Dunkin’ Donuts for several years until 2012, said in a lawsuit that he had worked roughly 70 hours or more in a typical week. He testified that he had spent 90 percent of his time on tasks like serving customers and cleaning, and that he could not delegate this work “because you’re always short on staff.”

Mr. Marzuq eventually won a settlement worth $50,000. A lawyer for T.J. Donuts, the owner of the Dunkin’ Donuts franchise, said the company disputed Mr. Marzuq’s claims and maintained “that he was properly classified as a manager.”

Workers and their lawyers said employers exploited their desire to move up the ranks in order to hold down labor costs.

“Some of us want a better opportunity, a better life for our families,” said Gonzalo Espinosa, who said that in 2019 he often worked 80 hours a week as the manager of a Jack in the Box in California but that he did not receive overtime pay. “They use our weakness for their advantage.”

Mr. Espinosa said his salary of just over $30,000 was based on an hourly wage of about $16 for a 40-hour workweek, implying that his true hourly wage was closer to half that amount — and well below the state’s minimum wage. The franchise did not respond to requests for comment.

The paper by Dr. Cohen and his co-authors includes evidence that companies that are financially strapped are more likely to misclassify regular workers as managers, and that this tactic is especially common in low-wage industries like retail, dining and janitorial services.

Still, lawyers who bring such cases say the practice also occurs regularly in white-collar industries such as tech and banking.

“They have a job title like relationship manager or personal banker, and they greet you, try to get you to open account,” said Justin Swartz, a partner at the firm Outten & Golden. “They’re not managers at all.”

Mr. Swartz, who estimated that he had helped bring more than two dozen overtime cases against banks, said some involved a so-called branch manager inside a big-box store who was the only bank employee on site and largely performed the duties of a teller.

The practice appears to have become more difficult to root out in recent years, as more employers have required workers to sign contracts with mandatory arbitration clauses that preclude lawsuits.

Many of the cases “are not economically viable anymore,” said Mr. Swartz, citing the increased difficulty of bringing them individually through arbitration.

Some lawyers said only an increase in the limit below which workers automatically receive overtime pay is likely to meaningfully rein in misclassification. With a higher cutoff, simply paying workers overtime is often cheaper than avoiding overtime costs by substantially increasing their pay and labeling them managers.

“That’s why companies fought it so hard under Obama,” said Ms. Aaron, a partner at Winebrake & Santillo, alluding to a 2016 Labor Department rule raising the overtime limit to about $47,500 from about $23,500. A federal judge suspended the rule, arguing that the Obama administration lacked the authority to raise the salary limit by such a large amount.

The Trump administration later adopted the current cutoff of about $35,500, and the Biden administration has indicated that it will propose raising the cutoff substantially this year. Business groups say such a change will not help many workers because employers are likely to lower base wages to offset overtime pay.

Noam Scheiber is a Chicago-based reporter who covers workers and the workplace. He spent nearly 15 years at The New Republic, where he covered economic policy and three presidential campaigns. He is the author of “The Escape Artists.” @noamscheiber

오늘부터 매니저로 승진… 대신 오버타임 수당은 끝”

 http://www.koreatimes.com/article/20230313/1456912

오늘부터 매니저로 승진… 대신 오버타임 수당은 끝”

 댓글 2023-03-14 (화) 남상욱 기자

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▶ 업체들 인건비 절약‘편법’ 간부급 자격조건 준수해야

▶ 가주는 최저임금 2배 지급 노동법 위반 벌금 등 처벌

인건비 절감을 목적으로 권한 없는 매니저 직원들을 업주들이 양산하고 있어 매니저의 최저 연봉 수준을 대폭 상향해야 한다는 지적이 나오고 있다. [로이터]

# 제조업체를 운영하고 있는 한인 오모씨는 오버타임 미지급에 식사 휴식 시간 미보장, 타임카드 미작성 등으로 10만달러에 가까운 배상금을 물게 됐다. 오씨는 “매니저로 임명하면 오버타임 수당을 주지 않아도 되는지 알았다”며 “오버타임 수당을 줄이려다 더 큰 금전적 손해를 봤다”고 했다.

# 식당에서 일하고 있는 한인 여성 김모씨는 지난해부터 주당 평균 50시간을 일하고 있지만 오버타임 수당을 전혀 받지 못하고 있다. 업주가 김씨를 부매니저로 임명하면서부터다. 김씨는 “시간급 대신 월급제로 바뀌었지만 최저 임금 보다 조금 높은 수준이고 동료 대신 일하는 시간이 늘었다”며 “권한은 없고 오버타임 수당도 받지 못하고 있지만 매니저 승진을 기대하며 참고 있다”고 말했다.

직원을 매니저로 승진시키거나 매니저를 채용한다는 구인 광고를 내는 일이 한인을 포함한 업주들 사이에서 급증하고 있다. 인플레이션과 고금리, 여기에 인력난까지 겹치자 오버타임 수당 등 인건비를 줄이려는 업주들의 꼼수다. 권한은 없고 ‘무늬만 매니저’를 양산하면서 오버타임 수당 없이 ‘열정 페이’를 요구하는 업주들의 관행에 정당한 노동의 대가를 받지 못하고 있는 매니저 직원들의 한숨이 깊어지고 있다.

최근 뉴욕타임스는 매니저의 자격 요건을 충족하지 않으면서 직원을 매니저로 승진시키면서 직원들에게 오버타임 수당 지급을 회피하는 일종의 임금 착취 현상이 업주들 사이에서 급증하고 있다고 보도했다.

하버드대와 텍사스대의 공동 조사 보고서에 따르면 2010년에서 2018년 사이에 매니저 직급이 5배나 급등한 것으로 나타났다. 이중 상당수는 연방정부가 정한 매니저의 최저 연봉인 3만5,500달러을 받는 것으로 집계됐다. 매니저의 최저 연봉을 지급하는 대신 오버타임 수당 대상에서 제외한 것이다. 이를 통해 업주들은 연 40억달러에 가까운 오버타임 수당을 경감한 반면에 권한 없이 무늬만 매니저인 직원들은 13%의 임금을 덜 받았다고 신문은 지적했다.

업주들이 매니저 직급을 남발한 데는 코로나19 팬데믹이 도화선이 됐다. 팬데믹으로 대거 인력들이 빠져 나가면서 업주들이 인력 부족을 메우기 위해 직원들을 매니저로 승진시키면서 2명의 몫을 1명에게 몰아주는 관행이 성행했다.

문제는 오버타임 지급이 면제되는 매니저 자격 요건을 충족하지 못하고 있는 현실이다. 매니저로 분류되려면 ▲경영과 관련된 업무와 책임을 수행하고 ▲직원 채용과 해고의 권한이 있고 ▲업무 수행의 재량권을 갖고 ▲최소 연봉이 연 3만5,500달러 이상이어야 한다. 캘리포니아의 경우 매니저의 최소 연봉은 최저 임금의 2배 이상을 받아야 한다. 가주 최저임금이 15.5달러인 점을 고려하면 2배인 31달러에 해당되는 5만5,000달러 이상이 매니저의 연봉이다.

이 같은 조건을 충족하지 못하면 아무리 매니저 직급이라 하더라도 오버타임 수당을 비롯해 각종 직원 혜택을 받아야 한다.

김해원 노동법 변호사는 “오버타임 면제에는 복잡한 기준들이 적용되는데 많은 한인 업주들은 연봉만 많이 주면 된다고 착각들 하거나 매니저 호칭만 주면 된다고 착각해서 소송을 당해 수 만 달러의 배상에 직면하는 실수를 저지른다”고 지적했다.

이참에 연방정부의 매니저 연봉 하한선을 대폭 인상해야 허울 뿐인 매니저 직급 부여 관행에 제동을 걸 수 있다는 목소리가 높아지고 있다. 매니저 연봉을 지급하는 것보다 오버타임 수당을 정상적으로 지급하는 게 금전적으로 유리하다는 인식을 업주들에게 심어 주어야 한다는 것이다.

<남상욱 기자>