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Businesses Software The Almighty Buck

App Companies Propose New Model For Worker Benefits (cio.com) 113

itwbennett writes: In late October, four delivery drivers for the app-based Amazon Prime Now service filed a class-action lawsuit alleging the company misclassifies its workers as contractors. In June, the California Labor Commission ruled that Uber drivers are employees, not contractors. Now, worker advocacy groups, companies offering services through apps (including Lyft, Etsy, Care.com, and Instacart), a variety of policy experts, and venture capitalists are proposing a new model for worker benefits that will be "portable" across the number of jobs they do in the new on-demand economy. "Self-employed workers choosing to engage in flexible work may also encounter unforeseen work disruptions or other hardships without the protections and benefits that may be provided through full time employment," the group said in a statement posted on Medium.
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App Companies Propose New Model For Worker Benefits

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  • by Anonymous Coward on Wednesday November 11, 2015 @12:01PM (#50909093)

    The model of relying on a business to provide benefits to its employees in lieu of the government or the employees themselves turns the employee into a serf, unable to leave in fear of losing their benefits. COBRA [dol.gov] was the last grand experiment in government meddling in "portable" healthcare benefits and it was by all accounts a miserable failure.

    • Re: (Score:2, Flamebait)

      It's like being self insured without actually making enough money to afford insurance! How awesome is that?!?
    • by ShanghaiBill ( 739463 ) on Wednesday November 11, 2015 @12:25PM (#50909295)

      The model of relying on a business to provide benefits to its employees in lieu of the government or the employees themselves turns the employee into a serf

      Indeed. In Maoist China, each factory ran their own schools. So if you changed jobs, your kids had to switch to a new school. This is clearly idiotic, but our system of employer provided healthcare/pensions is just as dumb. There are advantages and disadvantages to privatized and socialized healthcare and pensions, but the third option, of employer provided benefits, gives the worst of both, with the benefits of neither. Employees should be paid with money and only money. Benefits should be provided privately or by the government. They should not be tied to employers. That would be better for workers and companies.

      • ...our system of employer provided healthcare/pensions is...dumb. There are advantages and disadvantages to privatized and socialized healthcare and pensions, but the third option, of employer provided benefits, gives the worst of both, with the benefits of neither. Employees should be paid with money and only money. Benefits should be provided privately or by the government. They should not be tied to employers.

        Yeah, this is how I feel too. If employers are responsible for providing health insurance, why not just skip the middle man and pay your employees in surgical gauze and forceps?

        The current system doesn't really make any sense--it just sort of happened. It started out with the government taxing employees to pay for the unemployed, then it just sort of mutated from there, because elected officials never saw an unnecessarily complicated regulatory system they didn't immediately want to make worse. We need t

      • by mi ( 197448 ) <slashdot-2016q1@virtual-estates.net> on Wednesday November 11, 2015 @03:05PM (#50910455) Homepage Journal

        Employees should be paid with money and only money.

        And they were — until the US government imposed limits on salaries during the Second World War [wikipedia.org]. Employers wanting to attract employees invented the "benefits packages" of various kind, that circumvented the government-imposed maximum wage limits.

        As the consumers of and payers for services became different entities, the prices started to rise. Attempts at finding a government-based solutions to the government-created problem further exacerbated it [healthaffairs.org], as always happens. And continue to [forbes.com].

        • One problem is getting health care when it gets costly. If you've got a chronic expensive condition, then before the ACA your only hope of insurance was a group plan, which typically meant employer-provided insurance.

        • by Bengie ( 1121981 )
          Healthcare costs increase are mainly due to a lack of universal coverage and high administrative overhead of working with a complicated mess of insurance companies. Preventative costs are much cheaper than paying for an ER bill and lost time. If someone can't afford the cost of preventative doctor visits, they'e not going to be able to afford the 10x+ more expensive ER trip. That's a pure loss to the hospital that gets passed on to those who can afford it. Prices go up.

          About $0.50 on the dollar goes to ad
          • by mi ( 197448 )

            Healthcare costs increase are mainly due to a lack of universal coverage

            If this were the reason, we would've seen sharp increases before WW2 as well. We did not. Fail.

            Working with the government is much simpler, which saves time, which saves money

            That may be, because the government has unlimited pockets — if they run short, they can always take more money from taxpayers.

            I've not only learned this in class

            Ah, so you are still under the influence of the Illiberalism [motherjones.com] — college professors are overwh [washingtonpost.com]

            • by Bengie ( 1121981 )

              If this were the reason, we would've seen sharp increases before WW2 as well. We did not. Fail.

              You said "fail", which means you automagicaly win on teh intarwebs. Hospitals are saying this, teachers are saying this, insurance companies are saying this. Wait... Insurance companies are saying this? Why would a private insurance company argue that privatizing insurance is a bad idea.

              That may be, because the government has unlimited pockets — if they run short, they can always take more money from taxpayers.

              It doesn't really matter where the money comes from. If X consumes 5 man hours and Y consumes 2 man hours, Y is generally better for the economy as a whole.

              Ah, so you are still under the influence of the Illiberalism— college professors are overwhelmingly Left and getting worse

              Ahh, another person who can't think for themselves. Facts are facts.

      • by pnutjam ( 523990 )

        Employees should be paid with money and only money. Benefits should be provided privately or by the government.

        But how will I cheat on my taxes then...?

        It sounds like they are asking for Universal Healthcare.

    • This. At least once in my career I've taken a job with a potentially shaky company and negotiated that they would pay me extra to cover my existing benefit premiums rather than go on a company plan that could potentially go down the tubes (with the company) at any moment.

      Cash and some arms-length-ness can be nice.

    • serf srf/Submit noun an agricultural laborer bound under the feudal system to work on his lord's estate. You aren't in any way bound to an employer for benefits. Retirement can be rolled, becoming a new employee automatically qualifies you for open enrollment. Technically relying solely on the government for said benefits more fits with this definition, much harder to expatriate than find a new job, although also not impossible.
      • by jedidiah ( 1196 )

        It is commonplace for employers to not even offer insurance before 90 days. The "cobra" price for most employer insurance plans is absurd. Plus employers are prone to change policies frequently or even midyear screwing you out of your deductible.

        Fortunately in some states there were decent private health insurance options. Although those have kind of been trashed lately.

        • by Bengie ( 1121981 )
          Over here, Day 1 coverage for insurance, and while in the past decade they did change providers mid-year, our premiums were kept the same, the coverage was kept the same, and even the deductibles transferred. The next year the premiums were cut in half and coverage remained roughly the same. This was right after the Obamacare stuff kicked in a year or two ago. Losing track of time.
      • Retirement can be rolled

        Many pension plans require vesting, so if you quit or are fired, you forfeit the benefits. Also, many companies fund their pensions with their own stock, so if the company goes tits-up, you lose both your job and your savings at the same time.

        becoming a new employee automatically qualifies you for open enrollment.

        Not always. Companies can have a probationary period where new employees are ineligible for benefits. They can also exclude certain classes of employees, such as part-time, temp, union members (who get benefits through their unions), exempt/non-exempt, commission ba

        • There aren't all that many pension plans anymore. They've pretty much been replaced by employer-run 401(k)s, in which the employer often matches the employee contribution to some extent. Typically, there is a vesting period on the employer match, but that isn't usually all that significant.

    • if THEY set your schedule, like Lyft or any of the other 'shared jobs" YOU ARE A SERF.
      This is just the corporate attempt to not pay for the value of that availability at schedule and submission to working conditions without prior knowledge or leverage.
      Face it, the goal isn't serfdom
      It is slavery
    • by sjbe ( 173966 ) on Wednesday November 11, 2015 @01:09PM (#50909611)

      The model of relying on a business to provide benefits to its employees in lieu of the government or the employees themselves turns the employee into a serf, unable to leave in fear of losing their benefits.

      Which is I think a part of why Republicans seem to hate "Obamacare" so much. They've lost their leverage to keep people subservient.

      COBRA [dol.gov] was the last grand experiment in government meddling in "portable" healthcare benefits and it was by all accounts a miserable failure.

      It wasn't a failure. COBRA [wikipedia.org] did more or less what it was designed to do. It was designed to be a bridge, not ongoing portable insurance. The system around it was the failure. Used to be that if you lost your job you lost your health insurance too so you were doubly screwed. COBRA gave an (expensive) safety net option but it couldn't possibly solve the actual problem that was eventually solved with the Affordable Care Act. I've used COBRA insurance twice and it was fine for what it was.

      • by DarkOx ( 621550 )

        Affordable Care Act did not solve the problem at all in some ways it made it worse.

        Under the ACA a job loss for most folks means the same insurance loss or COBRA situations as before. We get our insurance as an employee benefit, which our employers offer because they will be punatively taxed otherwise. So in addition to a job loss and the need to find a new job you also need to find a new insurance carrier, that you might only use for months or weeks while you are out of work, or pay some hugely expensive

        • The ACA was compromised because Obama - instead of CRUSHING the private insurers when he had the votes - agreed to keep them in the system and negotiate terms with them in secret. We need a single payer system, like all other developed economies. Yes, that means higher taxes. Either we take care of one another, or we don't. If we want to maintain a "winner-takes-all" meme in America, where everything is rated in dollars,then we are finished as a culture, long term.
          • by DarkOx ( 621550 )

            My suggestion to dismantle the group market does not crush private insurance either. It just shifts who the client and payers are. If you kept the individual mandate (something I DO NOT SUPPORT) the size of the pool would remain about the same the nature of the participants would remain about the same. The difference is people's insurance would be as decoupled from their employer as their cable bill is and that would be a good thing! It would mean that changing jobs does not mean changing insurance pro

        • Yeah except everything you just said is bullshit

    • Except you're not locked in anymore because of the ACA. You always have an alternative now if no employer is offering you sufficient insurance. This was one of the stated benefits of ACA, no job lock.

  • On-demand first posting!?

  • by 0100010001010011 ( 652467 ) on Wednesday November 11, 2015 @12:02PM (#50909107)

    Right now when something is being built the builders call up the local unions and say "I'm going to need 5 Union plumbers and 2 Union electricians for 6 weeks".

    Present a single front to all companies needing developers for work weeks, salary and benefits.

    Just call it a Union. (And that's not a bad thing).

    • They won't have any strike power or collective bargaining rights to speak of. This is just a permatemp agency these companies want to form to get out of paying for health care and unemployment. It's another way for them to externalize their costs onto the employee or the taxpayer. Don't be fooled.
    • by jrumney ( 197329 )

      Present a single front to all companies needing developers for work weeks, salary and benefits.

      I know they confused things by throwing the buzzword "App" in there, but they are talking about the "idiot behind the wheel" kind of driver, not the low level software for making hardware work kind.

  • by Anonymous Coward
    "Self-employed workers choosing to engage in flexible work may also encounter unforeseen work disruptions or other hardships without the protections and benefits that may be provided through full time employment,"

    Is this our new term for the under and unemployed? They "choose" to struggle now?
    • Well...you can choose a 9-5 type job, or you can choose a different style...
      • I can't believe anyone would choose an Uber-type job if they were eligible in any way for a 9-5 job. People take Uber jobs because they either can't find alternative employment or they can't hack it in a standard job interview.
        • I can't believe anyone would choose an Uber-type job if they were eligible in any way for a 9-5 job.

          I know several people that do that. My sister drives for Uber. She has a day job, but drives for a couple hours each evening to earn some extra cash. She enjoys meeting new people, and although driving is stressful for me, she says it is relaxing.

      • And there you go, proving the GP's point.

  • by Bruce66423 ( 1678196 ) on Wednesday November 11, 2015 @12:06PM (#50909135)
    You pay them one rate as contractors, more cash with limited benefits, or as employees, with less cash but more benefits. Given the need for start ups to employee people on highly variable contracts, and the existence of people for whom variability is acceptable, this can be worked out. Where the problem lies in the growing tendency of firms such as supermarkets to keep a stock of variable hours labour. The ideal is to have a civilised conversation about this whole area; the danger is that we lose the ability to grow new start ups cheaply.
    • by TWX ( 665546 ) on Wednesday November 11, 2015 @12:18PM (#50909237)
      There never will be an ideal. That's why it's an ideal, it's a fictional asymptote that never be reached.

      This is why I am in favor of single-payer. Remove the concept of insurance altogether, it isn't insurance that people need, it's the ability to go to the damn doctor or hospital. Worried about fraud? The current system already has loads of fraud in the form of the screwed-up billing, fraud against the patient. Make fraud by the billing-entity (ie, the clinic or doctor) a federal crime.

      With medical care decoupled from the workplace, employers would have less incentive to restrict employee hours to the numbers needed to legally be part-time. More people that struggle to find full-time work could actually work full time in jobs that of-late have been part-time, like retail. It still has its downsides but if employees now can actually afford to make rent by working one job then quality of life is much improved.
      • As a Brit who enjoys the benefit of the NHS - which REALLY is free at the point of demand - I tend to forget just how messed up the US system is. If we spent the same proportion of our GDP on health as you do, it would give us an amazing service. We spend about half, and achieve about 95% of what you do.
        • by cas2000 ( 148703 )

          and that 95% service is available to everyone, not just a minority (mostly white and mostly upper-middle class or higher with good jobs)

    • Yeah this is pretty simple, and not new. One of the major reasons contract jobs pay more in cash is because they don't provide payment in the form of the employer paying your insurance and vacation. So you use some of the extra cash to buy insurance, on the Blue Cross web site - just like you'd buy anything else.

      I recently had two job opportunities - a regular employee at a IT security company for $x + insurance, or a contract with Apple for $20,000 more, and no insurance . The insurance and such include

  • Benefits my ass (Score:5, Insightful)

    by PopeRatzo ( 965947 ) on Wednesday November 11, 2015 @12:10PM (#50909173) Journal

    Stop calling them "benefits" and just call them what they are, which is compensation. Corporations (and politicians) have used the term "benefits" to be the equivalent of the corporations giving their employees welfare. They've actually used this term, "benefits" in PR campaigns to steal employees retirement packages.

    If you get health insurance, sick days, retirement, it's because you earned them. They are yours. It's not company largesse.

    • Contractors need to realize that they already get healthcare, retirement, sick days, etc., it's just that they need to manage them. The company manages some or all of those things for employees, but if a contractor wants the company to manage it for them there will be a commensurate cut in pay. It really is that simple

    • Compensation is codified in the law. Benefits are not.

      What they company must legally provide for you is not called a benefit. Sick leave, health insurance, etc in America provided by the employer is most definitely a benefit. Much of the rest of the western world doesn't use this term "benefit" to describe these as they are mandated part of the compensation packages for employment.

      I.e. even in Australia if you want to pretend you're a contractor you're legally required to separate a portion of your earnings

    • My industry uses something akin to a "collective benefits association" that handles benefits for employees that would work for multiple locations in the same industry. The company pays that association $X/hr for the employee and the benefits are distributed centrally by that association to the employees for all the pay received from multiple companies. This is for people classified as employees, not contractors. The association has to be adequately staffed though because their benefits are pro-rated by e

  • The only reason they're putting this out there is to avoid liability.
    • Close one loophole and they make another.

      Wonder what they'll do when enough people complain about how often salaried employees are misclassified as 'management' or "exempt" such that they can get infinite labor out of them. Amazon in particular ought to be worried.

  • single player healthcare is needed other stuff has law issues.

    Like uniforms cost can't pull some one under min wage and in some states uniforms must be free.

    Forcing an 1099 worker to use uniforms is not really legal and it limits them working for more then one place at the same time / limits them subbing work out.

    Forcing workers to buy / rent your tools has issues the big one is can't pull someone under min wage others very state to state / etc and for a 1099 it's dicey as well.

    Car Reimbursement you can't p

  • So if the problem is portability and income security, lets take that off the table.

    Solution: Universal healthcare, paid for by a corporate value added tax (rate to be set by actual costs from the previous few years costs).

    Job retraining issues?

    Solution: Free university tuition and subsidized apprenticeships for trades. Pay for that with a flat 50% income tax for income above ~200k (or whatever income level keeps the budget balanced, set by recent year incomes and projected budget costs).

    Any questions?

    • by Anonymous Coward

      Yes, I have a question. If healthcare portability is still an issue, how come? I was told the ACA was going to fix that along with all the other healthcare issues we were having in the US. I was told anyone who told me different was an idiot and a racist.

      Why are we asking the people who already "solved" the healthcare problem to solve it again? Its either solved or they are too incompetent to be able to solve it after spending $1 Trillion dollars.

      • ACA was a conservative patchwork solution, and is far less of a clean solution than single payer. It has helped to a great degree in reducing the ranks of the unemployed, and greatly eased suffering for many. It should be lauded for this.

        However it was never a 100% solution like single payer would be. It left hospital system in place with their huge waste and lack of transparency. It left most people with the same insurance they had, meaning that for the middle class if you change jobs you change insura

    • by jedidiah ( 1196 )

      > Any questions?

      What happens when the government kills one of my relatives through penny-pinching on diagnostic tests or it decides that expensive cancer drug keeping you alive is just too expensive?

      • by Anonymous Coward

        What happens when the government kills one of my relatives through penny-pinching on diagnostic tests or it decides that expensive cancer drug keeping you alive is just too expensive?

        The same thing that happens when you can't afford to buy the diagnostic tests or the expensive cancer drug keeping you alive, yourself. The same thing that happens when you can't afford the insurances being offered and still keep a roof over one's head. Which is, coincidentally, the same thing that happens when the insurance company decides to make more profits by restricting the tests they feel your doctor should order or forcing alternative treatments upon your doctor which have a better cost-success ra

      • by Anonymous Coward

        What happens today when your insurance company does the same thing?

      • They die.

        What happens when the private insurance kills one of my relatives through penny-pinching on diagnostic tests or it decides that expensive cancer drug keeping you alive is just too expensive?

        They die.

        No system is perfect. None.

        Our system has worse outcomes for more money than comparable countries with single payer healthcare. ACA has snubbed the costs and put in measures to improve outcomes, but these are just stopping our system from getting much worse rather than closing the gap of outcomes and

      • by DogDude ( 805747 )
        What happens when the government kills one of my relatives through penny-pinching on diagnostic tests or it decides that expensive cancer drug keeping you alive is just too expensive?

        With the government, you have an appeal process. When it's private insurance, you're fucked.
      • What happens when the government kills one of my relatives through penny-pinching on diagnostic tests or it decides that expensive cancer drug keeping you alive is just too expensive?

        They lose your vote, I'd imagine. What happens when a private insurance company does the same? Nothing.

  • I like this model of portable work. However, what needs to happen is that the companies that want to use this must allocate a fund or must pitch in so that they are paying some amount even if they dont have any work requirements currently. Its a sacrifice they need to make in return for the flexibility to hire people for only a short duration as per their work needs. In return, the workers get a little extra security and maybe some flexibility in deciding what they want to do as well.
  • by Anonymous Coward

    These guys are watching out for us and don't want the little guy to get hurt.

  • Instead make insurance compulsory and a general service for all without any deductibles. Your payment is determined based on your income. So if you do not have any income you are insured but have to pay nothing. Yes you call that socialism. I call it security. For example, until last month, I was working for the university. Presently, I am unemployed, because the project funding ended and a follow up project is still in the process to be granted (or not granted). So in the mean time, I get my money from une

  • For those of you as contractors, I highly recommend The Freelancer's Union (https://www.freelancersunion.org/). Liability, disability, and life insurance, all reasonable. Even medical and dental insurance in some places, like NYC.

    Reasonable prices, and fast customer service.

    Disclaimer: I'm just a happy customer/client/member, whatever you wanna call it.

  • In the US all or most states require you to have liability insurance to pay for any injuries or death, required just like the ACA mandates/requires you to buy health insurance.

    Guess what, some people don't. Or they just pay the initial premium to show coverage and then let the policy lapse.

    So some states also mandate that you have additional coverage in case the other guy is un-insured or under-insured (i.e. not enough to cover your co-pay).

    These APP companies are the un-insured guys. They could be respon

    • Or have a health care system that doesn't require anyone to have insurance. It could cover accidents and compensation as well, so there is no need to sue someone who injures you for rehabilitation and lost wages.
      Perhaps you could pay it from a levy on income. You could take a fixed % from employees/self employed people and a % based on the industry risk for the company making the income payment. That way every person pays the same % and the industries with the most accidents pay the most.

      You could call it s

  • by viperidaenz ( 2515578 ) on Wednesday November 11, 2015 @02:40PM (#50910239)

    That's why contract workers should be paid a lot more than an employee.
    If I find myself without a contract, I don't go bitching to a lawyer that I should have been classified as an employee and was unjustifiably dismissed.
    I accept that fact I am self employed. It helps I get paid twice as much as the employees I sit next to for doing the same job.

  • When I started in Engineering some of my friends decided to become contractors. They would typically make about twice my pay when they had work. The temp agencies they worked for took a cut and provides the benefits like health insurance. Of course this was 20 years ago so it was easy to find a cheap high deductible policy before they were banned.

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