Personal Injury Firm
Under a new SEC proposal announced recently, app-based companies like Uber, Lyft, and DoorDash could start offering equity compensation to their gig workers. A pilot program was proposed for tech platforms that employ food-delivery workers or drivers to get paid up to 15% of their compensation in stock instead of cash.
Before this proposed plan, gig workers could not be paid in equity, but regular employees could. However, food delivery drivers have especially proven their crucial role in the country’s economy throughout the coronavirus pandemic, delivering food and groceries to people in quarantine. The proposal reportedly addresses labor activist efforts that aim to improve job security and employee benefits for the fast growing gig-economy.
In a statement, the Chairman for the SEC Jay Clayton said: “Work relationships have evolved along with technology, and workers who participate in the gig economy have become increasingly important to the continued growth of the broader U.S. economy.”
And while the SEC proposal will be open to a 60 day public comment period, it may only come into force under new leadership chosen by President-elect Joe Biden.
Earlier this year, both Uber and Lyft were sued by the California attorney general to enforce a labor law that requires their gig workers to receive the same benefits and treatment as employees, AB5, which went into effect on Jan. 1st of 2020 yet the companies never complied. However, the companies won the ballot measure Proposition 22 this past election that will allow them to continue compensating their app-based workers as independent contractors rather than workers on their payrolls.
Along with Postmates and Instacart, the app companies collectively contributed around $200 million to support Proposition 22. Instead of a proper employment package, the companies promised voters new protections for its workers like health insurance for drivers who work 15 hours or more a week, occupational-accident insurance coverage and 30 cents for every mile driven, among other protections. Opponents said the promised benefits fell short of those awarded to full-time employees.