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Florida rules Uber drivers independent contractors

More rulings making users of apps independent contractors…

THE CAPITAL, TALLAHASSEE, December 3, 2015……… Amid a legislative battle about regulating app-based transportation services, Gov. Rick Scott’s administration Thursday said Uber drivers should be considered independent contractors instead of company employees.

The decision means former Uber drivers are not eligible to file for unemployment insurance in Florida. It also is part of a broader debate about how state and local governments should view the fast-growing car services that pose a major challenge to taxi and limo companies.

In a 26-page order released Thursday, state Department of Economic Opportunity Executive Director Jesse Panuccio offered a series of examples of the Uber business model. He wrote, for example, that drivers use their own vehicles and decide when to work.

“As a matter of common sense, it is hard to imagine many employers who would grant this level of autonomy to employees — permitting work whenever the employee has a whim to work, demanding no particular work be done at all even if customers will go unserved, permitting just about any manner of customer interaction, permitting drivers to offer their own unfettered assessments of customers, engaging in no direct supervision, requiring only the most minimal conformity in the basic instrumentality of the job (the car), and permitting work for direct competitors,” the order said.

But as an indication of the disagreements about such issues, California and Oregon officials have recently said Uber drivers should be considered employees of the companies.

“If a worker performs services integral to the business, it is likely the worker is an employee,” said an Oct. 14 advisory opinion issued by the Oregon Bureau of Labor and Industries. “Courts have found this factor particularly compelling. … Uber provides transportation services to its customers, services it cannot provide without its drivers. As such the driver’s work is not only integral but, a necessary part of Uber’s business. This indicates an employment relationship.”

The Florida order stemmed from unemployment claims filed in April by former Uber drivers Darrin McGillis and Melissa Ewers. The order indicates the state Department of Revenue in May issued findings that McGillis and Ewers had been employees of Uber. That led the company to file a protest with the Department of Economic Opportunity, which handles appeals of such issues.

Panuccio’s order reversed the findings of the Department of Revenue. Uber released a statement Thursday praising the order.

“This decision recognizes that Uber’s partners are independent contractors who use Uber on their own terms; they control their use of the app, deciding when and for how long they drive, and whether they drive at all,” the statement said. “Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss.”

The order was released a day after a state House subcommittee approved a bill (HB 509) that would prevent local governments from regulating Uber and other app-based transportation services. Taxi companies and local governments oppose the heavily lobbied proposal, with the taxi companies arguing that it would give app-based firms an unfair competitive advantage.

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A Vision of our Digital Future

Today’s world foretold…

A revolution in interaction

In 1997, McKinsey Quarterly published a piece titled simply “A revolution in interaction.” Examining how people and companies work together, it predicted a two- to fivefold increase in our capacity to interact—an increase driven by the expansion and falling cost of computing power and telecom networks.

The article envisioned the world we live in today. As it foresaw, businesses “benefit from the superior economics of specialized suppliers.” Customers “search exhaustively” for “the exact product of their choice at the lowest price”—which might come “from nearly anywhere in the world.” Intermediaries such as travel agents have foundered as providers go “directly to consumers via telephones and the Internet.” Web browsers “capture information about the interactions” with customers. And new techniques make it possible to transmit “music, photographs, and video in standard formats over a single electronic channel.”

Read this classic Quarterly article to learn more about today’s world—foretold nearly two decades ago.

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Toys ‘R’ Us Brings Temporary Foreign Workers to U.S. to Move Jobs Overseas

Not surprised, but saddened nonetheless, by what Toys R Us did with its accounting staff. They totally manipulated the spirit of the H1B visa to off shore jobs and humiliated their staff at the same time. 

HR / Talent / Operations Teams could morph into profit centers, so they avoid the same fate as the Toys R staff, transforming the way they are working.

When Congress designed temporary work visa programs, the idea was to bring in foreigners with specialized, hard-to-find skills who would help American companies grow, creating jobs to expand the economy. Now, though, some companies are bringing in workers on those visas to help move jobs out of the country.

For four weeks this spring, a young woman from India on a temporary visa sat elbow to elbow with an American accountant in a snug cubicle at the headquarters of Toys “R” Us here. The woman, an employee of a giant outsourcing company in India hired by Toys “R” Us, studied and recorded the accountant’s every keystroke, taking screen shots of her computer and detailed notes on how she issued payments for toys sold in the company’s megastores.

“She just pulled up a chair in front of my computer,” said the accountant, 49, who had worked for the company for more than 15 years. “She shadowed me everywhere, even to the ladies’ room.”

By late June, eight workers from the outsourcing company, Tata Consultancy Services, or TCS, had produced intricate manuals for the jobs of 67 people, mainly in accounting. They then returned to India to train TCS workers to take over and perform those jobs there. The Toys “R” Us employees in New Jersey, many of whom had been at the company more than a decade, were laid off.

Read full article here

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The workforce crisis of 2030 — and how to start solving it now

It sounds counter intuitive, but by 2030, many of the world’s largest economies will have more jobs than adult citizens to do those jobs. In this data-filled — and quite charming — talk, human resources expert Rainer Strack suggests that countries ought to look across borders for mobile and willing job seekers. But to do that, they need to start by changing the culture in their businesses.

click here to view this talk on

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Uber Drivers Suit Granted Class-Action Status

Let’s see how this plays out!

Three drivers sued company over contractor status

Uber Technologies Inc.’s effort to stifle a legal challenge to its business model was struck down on Tuesday by a federal judge, who granted class-action status to a lawsuit claiming the car-hailing service treats its drivers like employees without providing the necessary benefits.

A 68-page court ruling from U.S. District Judge Edward Chen in San Francisco ordered that the suit, brought on behalf of three drivers, applies to all drivers in California who didn’t waive their right to the class-action arbitration.

The ruling sets the stage for a high-profile legal battle which could have sweeping implications for Uber’s business model and set a precedent for dozens of startups whose future fortunes rely on independent contractors to deliver food, run errands and clean houses.

Millions of Americans are opting for more flexible work arrangements that let them set their own schedules and hold multiple part-time occupations.

Uber has raised billions of dollars from investors at a valuation that has surged to $51 billion on the premise that it operates a technology platform connecting drivers and passengers, rather than a taxi service which owns cars and employs drivers. If the class-action suit succeeds, it could force Uber to pay drivers for health insurance, workers’ compensation and work expenses such as tolls, fuel and car repairs.

In a statement, an Uber spokeswoman said the company plans to appeal Judge Chen’s decision to certify class-action status. She also pointed out that Tuesday’s ruling only permits a minority of California drivers to join the class, as most drivers waived their right to class-action arbitration when Uber updated its driver contract last year. The suit originally aimed to certify a potential class of all 160,000 people who have driven for Uber in California.

The judge also decided to exclude some drivers who work for independent transportation companies. That means that one of the three drivers who initially brought the suit, Thomas Colopy, may himself be eliminated from the class.

“While we are not surprised by this court’s ruling, we are pleased that it has decided to certify only a tiny fraction of the class that the plaintiffs were seeking,” the Uber spokeswoman said.

The line between employee and contractor is vague, and in most states depends on variables including hours worked, who provides the necessary tools and whether the job requires special skills.

Uber argued that the vast majority of these workers prefer the flexibility that being an independent contractor affords them. In July, the company provided the court with 400 written declarations from drivers who say they prefer to be independent contractors because of this flexibility.

During opening arguments in early August, Ted Boutrous, an attorney representing Uber, said drivers have also signed at least 17 different versions of a contract with the company, each of which contains slight differences. In some of those contracts, drivers may have even waived their right to be part of a class-action suit.

Judge Chen had questioned the relevance of 400 drivers in a class he said could potentially include 160,000 individuals. Almost all class-action suits include some members of the class who object to its aim, he said.

Shannon Liss-Riordan, the attorney representing the three drivers, argued that Uber controls so many aspects of the drivers’ experience—from setting fares to determining when and why they can be terminated—that they are more like employees than independent contractors, as Uber currently classifies them.

In an emailed statement Tuesday, Ms. Liss-Riordan called Judge Chen’s ruling a “major victory” that will give thousands of Uber drivers the opportunity to recover expenses. She also said if successful, the case could have repercussions for all Uber drivers in the U.S.

“If we are successful for California drivers, we intend to appeal the ruling that limited the case to California and will seek reimbursement for expenses, as well as tips that were not distributed to Uber drivers, around the country,” Ms. Liss-Riordan said in the statement.

Ms. Liss-Riordan said about 1,000 Uber drivers from California and another 1,000 from elsewhere in the U.S. have contacted her office for more information about the case.

In a separate case, California’s labor commissioner in June found that Uber treated one of its workers as an employee, forcing the taxi service to pay her the back wages she would have received as an employee.

The outcome of this lawsuit could also set a precedent that could carry over to other cases representing a broader group of Uber drivers and those outside of California, said Jim Evans of Alston & Bird LLP, who has represented employers in class-action cases around the issue of employee misclassification.

“If they are the same issues affecting the same group or type of employees then it could bind them in other litigation,” Mr. Evans said.

This class-action case is likely to take years to reach an outcome, Mr. Evans cautioned.

Amid a number of similar suits threatening to reclassify contractors as employees, many startups aren’t waiting for the legal system to play out.

In recent weeks several startups that rely on a freelance work force have said they are switching their business models. Luxe Valet Inc., an urban car-parking service, for example, said in July it planned to convert hundreds of parking attendants across seven U.S. cities to employees and pay for various expenses. Delivery startups Shyp Inc. and Instacart Inc. have also laid plans to switch.

Other companies, including Uber rival Lyft Inc. and delivery company Postmates Inc., have stood their ground, insisting that the majority of their chauffeurs and couriers enjoy the freedom of being independent contractors.

By Douglas Macmillan – Wall Street Journal

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Why I’m Not Looking to Hire Computer-Science Majors

It is difficult to find validated skills….

Finding software developers is hard, especially with colleges doing such a rotten job of teaching them skills.

I usually say the hardest part of running a tech startup is raising money, but that’s a bit of a smokescreen: We spend the money on software developers, who are an incredibly hot commodity in scarce supply. Finding them is the toughest task.

Part of the problem is that startups have to compete with hegemons like Google and Facebook that offer extraordinary salaries for the best talent. I recently met a college student whom Facebook recruited as a summer intern at $10,000 a month. A junior developer fresh out of college can expect to earn around $10,000 monthly, plus benefits, a $100,000 signing bonus and $200,000 in stock options. For a more experienced developer, the sky’s the limit. Business Insider reported last year that a startup offering an annual salary of $500,000 was unable to lure a senior developer away from Google because he was earning $3 million a year in cash and stock.

A small startup has to compensate for its relatively anemic cash offers with more generous stock grants, and—our best feature—a lifestyle of low authority and high responsibility, where each developer sees his work changing the product on a daily basis.

The thing I look for in a developer is a longtime love of coding—people who taught themselves to code in high school and still can’t get enough of it. The eager but not innately passionate coders being churned out of 12- and 19-week boot camps in New York tend not to be the best: There are too many people simply looking for a career transition, and not enough who love coding for its own sake.

The thing I don’t look for in a developer is a degree in computer science. University computer science departments are in miserable shape: 10 years behind in a field that changes every 10 minutes. Computer science departments prepare their students for academic or research careers and spurn jobs that actually pay money. They teach students how to design an operating system, but not how to work with a real, live development team.

There isn’t a single course in iPhone or Android development in the computer science departments of Yale or Princeton. Harvard has one, but you can’t make a good developer in one term. So if a college graduate has the coding skills that tech startups need, he most likely learned them on his own, in between problem sets. As one of my developers told me: “The people who were good at the school part of computer science—just weren’t good developers.” My experience in hiring shows exactly that.

This is a shame because the young people who get degrees in computer science or engineering often have the makings of great software developers—the interest is there. But the education is a failure.

Today we insist on higher-education for everything—where a high-school diploma for a teacher or a reporter was once adequate, a specialized degree in education or journalism is now required. But my lead developer didn’t graduate from college, and neither did my other full-stack developer. I do have one developer with a degree in electrical engineering: Did he learn any of his development skills in college, I ask? No.

There is an opportunity to relieve the drought of qualified software developers that has driven up prices and is stunting startup growth: A serious alternative to the $100,000 four-year college degree wouldn’t even need to be accredited—it would merely need to teach students the skills that startups are desperate for, and that universities couldn’t care less about.

By Daniel Gelenter – Wall Street Journal

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Why Americans face a future of uncertain work

The World Economic Forum acknowledges that the American workforce is rapidly changing.

As Labor Day looms, more Americans than ever don’t know how much they’ll be earning next week or even tomorrow.

This varied group includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

On demand and on call – in the “share” economy, the “gig” economy, or, more prosaically, the “irregular” economy – the result is the same: no predictable earnings or hours.

It’s the biggest change in the American workforce in over a century, and it’s happening at lightening speed. It’s estimated that in five years over 40 percent of the American labor force will have uncertain work; in a decade, most of us.

Increasingly, businesses need only a relatively small pool of “talent” anchored in the enterprise –  innovators and strategists responsible for the firm’s unique competitive strength.

Everyone else is becoming fungible, sought only for their reliability and low cost.

Complex algorithms can now determine who’s needed to do what and when, and then measure the quality of what’s produced. Reliability can be measured in experience ratings. Software can seamlessly handle all transactions – contracts, billing, payments, taxes.

All this allows businesses to be highly nimble – immediately responsive to changes in consumer preferences, overall demand, and technologies.

While shifting all the risks of such changes to workers.

Read full article here

By Robert Reich, Agenda

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Why 6 Million Americans Would Rather Work Part Time

They don’t want to commit to one job or employer.

With jobs more plentiful these days, Matt Tait could easily find full-time work. But he wanted to focus on his wooden toy business and took a part-time gig at Team Detroit, Ford Motor’s advertising agency.

It’s a win-win. Tait’s boss is happy to have him because the 31-year-old graphic designer’s outside activities make him more creative. And Tait has time to run Tait Design Co., which sells balsa airplanes and wooden yo-yos of his own design.

Six million Americans like Tait are choosing to work part time, according to the U.S. Bureau of Labor Statistics. Typically young and college-educated, they’re not doing so because personal or economic circumstances forced them to. Rather, many are abandoning the traditional career path their parents took and working just enough hours to pay the bills or pursue a passion: toy making, puppetry, nonprofit advocacy. Their numbers have increased 12 percent since 2007, according to the BLS, a shift with broad implications for hiring practices.

Read full article in Bloomberg Business

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