Companies promise new benefits for drivers under Mass. ballot proposal. Labor advocates see attempt to skirt wage laws

A proposed statewide ballot question for 2022 would ask voters whether to define ride-hailing and delivery drivers as independent contractors rather than employees.

The coalition behind this initiative, funded by several app-based corporate giants, promises its proposal would guarantee a minimum pay rate and give workers added benefits. But some labor advocates say its goals are a veiled attempt to skirt the state’s labor laws.

Opponents say the potential ballot question doesn’t account for work-related expenses and would deprive some workers of benefits guaranteed to employees. To make their point, these critics point to Proposition 22 in California, a similar controversial measure passed last year.

The top financial backers of that proposal were the same companies backing the Massachusetts proposals: DoorDash, Instacart, Lyft and Uber.

There are two versions of the ballot proposal; the core difference between them is one includes mandatory safety training for drivers. Both proposals recently cleared a procedural hurdle in the ballot petition approval process, garnering more than 100,000 signatures each. If the Legislature does not act on either proposal by May, at least one would likely be put to voters.

The Massachusetts Coalition for Independent Work said the ballot proposal's central goal is to legally designate app-based drivers as independent contractors. This would mean workers would not be treated as employees, who are by law entitled to hourly minimum wage, overtime and other protections. Today, workers in these industries do not receive those benefits and protections.

“Passing this bill is necessary to protect drivers' ability to work as independent contractors,” said Conor Yunits, a spokesman for the coalition. “It secures their right to drive when, where and how they want."

Raya Denny, a 23-year-old from Springfield, said she's been driving for Lyft for nearly four years now. Speaking on behalf of the coalition, Denny said she wants to ensure independent status because it's most convenient for her schedule.

"For me, flexibility is everything, and I need to remain flexible because I am a college student," Denny said. "So during the day, I just need to be able to get my college work done and any other tasks or appointments or whatever I need to do."

But, labor advocates who oppose the potential measure, like attorney Shannon Liss-Riordan, say it aims to declare certain workers independent contractors “so that the companies wouldn't have to comply with any of the wage laws with respect to them, and they would provide minimal — what you might call substitute — benefits.” Liss-Riordan is a member of the Coalition to Protect Workers’ Rights, the main group fighting against the proposal.

In July 2020, Attorney General Maura Healey sued some of the ride-hailing companies, arguing in her lawsuit that the companies do not pass Massachusetts' three-part test to designate workers as independent contractors rather than employees.

The law states workers must meet the following conditions, or they're assumed to be an employee:

Healey's office, which reviews all proposed ballot initiatives for whether they meet the state's constitutional requirements, allowed the coalition's proposals to move forward in August.

"The personal policy views of the Attorney General or any members of our office play no role in certification decisions," a spokesperson for Healey's office wrote in an email, adding that constitutional standards for certification are different from whether the proposal violates other existing state laws.

Liss-Riordan has also sued ride-hailing and delivery companies over how they classify workers. She said the companies have avoided going to court by opting for arbitration — sometimes individually settling with drivers.

“Uber and Lyft and DoorDash and Grubhub and all of these so-called gig companies have been violating Massachusetts law ever since they started,” she said. “These workers, under current Massachusetts law, I have no doubt are employees.

“And now they're going back and trying to change our law to legitimize what they've been doing, which has been in violation of our law all these years.”

“Uber and Lyft and DoorDash and Grubhub and all of these so-called gig companies have been violating Massachusetts law ever since they started. These workers ... I have no doubt are employees."

Shannon Liss-Riordan

Healey’s lawsuit could cause more concrete change to the law, Liss-Riordan said, since government entities like the AG's office do not have the same obligation to settle in arbitration.

The Coalition to Protect Workers’ Rights' organizing director, Jonathan Paz, said the question is an attempt from the companies to avoid taxes and liability.

“There's nothing in Massachusetts general law that forces them to determine a schedule for all these employees, if you will — de facto employees,” Paz said. “They want to create an underclass of drivers and consider them independent contractors because that's what their basic business model predicates in the first place.”

But Yunits said there are currently no examples of workers designated as employees being able to maintain the kind of flexibility drivers now enjoy.

“There's nothing in the law that prevents it, but ... if it could be done, it would be done somewhere else,” he said. “The laws of economics show that is a false assertion because it just simply doesn't work. You can't — if companies have to have their own employees, they need to have at least some control over when those employees are working or where they're working, or how often they're working or what time they're working.”

The bill guarantees minimum compensation for time spent actively driving a passenger or completing a delivery. Before tips, that calculation would be equal to 120% of the state’s minimum wage, plus a per-mile amount that starts at 26 cents, adjusted for inflation.

However, that wage floor doesn’t include time between rides. Liss-Riordan said that because the initiative only applies to so-called "engaged time," it doesn’t truly provide an hourly minimum wage.

“They don't count all of the time that is necessarily spent between tasks. So for instance, for ride-hail drivers, there's a lot of time between dropping off the passenger and getting your next pick-up,” she said. “For food delivery drivers, there's waiting time and downtime between deliveries.”

Some drivers say those moments make up a significant portion of their day. Beth Griffith, executive director of the Boston Independent Drivers Guild, which also opposes the measure, estimates about a third of her time as a driver was spent between trips or deliveries. Griffith was an Uber and Lyft driver for about six years before she stopped as the pandemic gripped the state.

Critics also say that, aside from the proposed mileage allowance, the initiative doesn’t account for costs incurred on the job.

“It is unfortunate that the drivers, some of them are ignorant of the law, but some of them just don't care,” Griffith said. “And then I ask them, I say, ‘Well, do you put away for retirement? Do you put away for sick time? Are you putting away for vacation?’ Nobody does. … I do. That's why, after all my expenses, my profit is low.”

A recent report from researchers at the University of California-Berkeley Labor Center estimated a driver working 15 hours per week could see an hourly wage floor of just $4.82 when accounting for time between rides, additional benefit costs and mileage that goes unreimbursed.

But Yunits said that analysis isn't accurate, and pointed to a conflicting report from the University of California-Riverside. Those researchers estimated a worker driving 15 or 30 hours a week would earn $27.58 after accounting for wait time and expenses. The research costs of the report were covered by Lyft.

The discrepancy between the reports appears to be due in large part to a disagreement about what counts as "waiting time" for workers.

"There are thousands of available jobs in Massachusetts, all of which are paying minimum wage or higher," Yunits said. "To suggest that these drivers would drive for $5 an hour when they could do virtually anything else ... that is somewhat of an insult to the drivers here."

"To suggest that these drivers would drive for $5 an hour when they could do virtually anything else ... that is somewhat of an insult to the drivers here."

Conor Yunits

The proposal outlines other new benefits for some eligible ride-hail and delivery drivers, such as health care premium reimbursements and paid sick time.

The companies would be required to treat drivers as eligible for leave under the Massachusetts Paid Family and Medical Leave Act.

Drivers who average at least 25 hours per week in engaged time would be eligible for a quarterly health care stipend equal to 100% of the average Affordable Care Act contribution. Those who average 15 hours or more would be eligible for a 50% payment.

Drivers also would earn an hour of paid sick time for every 30 hours spent completing rides or deliveries, up to 40 hours per calendar year.

Additionally, the companies would be required to provide accident insurance for drivers who are hurt or killed “while fulfilling or accepting requests and not engaging in personal activities,” according to the proposal summary.

The proposal also includes some new protections for drivers. It would prohibit the companies from terminating or refusing to contract with workers on the basis of race, sex, sexual orientation or other protected characteristics. Drivers who are terminated would be given a chance to appeal.

"Many, if not all, the companies already practice these anti-discrimination policies, but this [ballot question] would actually put them into law," said campaign spokesman Yunits.

Griffith, director of the drivers’ guild, said drivers need protections that go beyond what the ballot campaign is offering. She said she faced sexual harassment, racial profiling and sexism as a driver.

“We need protections against discrimination,” Griffith said. “There are people that because they have an Arabic name, they have an accent, because they're a woman; I've had drivers say … a male passenger basically tried to sexually assault them. It's just, it's crazy.”

Uber, Lyft, Doordash and Instacart each hold policies stating that they will not tolerate discrimination or harassment toward riders or drivers. However, it is unclear how the companies handle such incidents beyond deactivating users from their platforms.

When California's Proposition 22 passed last year, many labor advocates considered that ballot measure a hit to workers’ rights. It was the first law that designated app-based workers as independent contractors.

The Associated Press reported the ride-hailing giants backing the measure spent more than $200 million to advance it, making it the most expensive ballot initiative in U.S. history.

All four companies financially backing the campaign did not respond to requests for comment, or referred the request to the Coalition for Independent Work.

Proposition 22 has already faced legal challenges on the grounds that it’s both in violation of the California Legislature’s power to expand compensation benefits and a state law requiring ballot initiatives to only address a single topic or issue. (Massachusetts does not have a single-subject law.)

In August, a Superior Court judge ruled that sections of the law were unconstitutional on both grounds, and that it was therefore unenforceable. An attorney has filed an appeal to the ruling on behalf of Prop 22's backers.

Campaign spokesman Yunits called Prop 22 a "smashing success." He said Healey's lawsuit against Uber and Lyft is the No. 1 reason the ballot question is now being pursued in Massachusetts, in particular.

The suit, he said, "would upend the industry for drivers and make it so that drivers would be forced to become employees and to protect their independent contractor status."

Attorney Liss-Riordan noted Massachusetts has one of the strongest tests to determine worker classification in the U.S.; California’s law was modeled after it. She said her group has hired legal counsel and is exploring challenging the proposal.

“We wouldn't be surprised if there were [legal] challenges," Yunits said, "but we fully expect that this question will reach the ballot if the Legislature doesn't address it first."

Uber's CEO said last November that the company hoped to pass similar measures in other states.

“We were the first to come forward with this [independent contractor]-plus model, the idea that drivers deserve flexibility plus benefits," CEO Dara Khosrowshahi told the Washington Post. "We want to have a dialogue with governments [in] other states.”

Khosrowshahi isn't alone in that idea. Many labor advocates say California likely was just the first battleground for this fight.

"We're going to become ground zero for the state of the labor movement."

Jonathan Paz

Paz, the director for the Coalition to Protect Workers’ Rights, said he believes if passed, the Massachusetts proposal will become the model companies use in other states.

“We're going to become ground zero for the state of the labor movement,” Paz said. “Is the future of gig work where we codify those very elements I was mentioning — no minimum wage, no benefits, no worker's comp, no basic civil protections from discrimination — or, is the future of work going to be more nuanced and actually take care of the employees?”

The secretary of state’s office now will process signatures collected for both versions of the ballot initiative before sending the petitions to the Legislature.

Lawmakers have until May to act on them. (Similar legislation was filed in the State House this year, but did not gain much traction. A hearing was held in October, but no further action has been taken.)

If legislators do not make a move, the petitioners will need to collect an additional 13,374 signatures before July to land on the 2022 ballot.

Proponents launched their campaign's first official ad this week.