Amazon Logistics' argument that "gig" workers are independent contractors already has been rejected by courts three times, Legal Action of Wisconsin said in a state Supreme Court filing.
Amazon is seeking to overturn a Court of Appeals decision finding that the gig drivers are indeed employees under state law and are entitled to unemployment benefits. Amazon wants them to remain classified as independt contractors.
"If this Court were to find that Amazon Logistics drivers were not employees, it would abandon the principles and presumptions animating Wisconsin’s pioneering unemployment insurance law and may well make Wisconsin an outlier," LAW lawyer Brenda Lewison wrote in a friend of the court brief filed in Amazon Logistics Inc. v. Labor and Industry Review Commission (LIRC). (The Department of Workforce Development also is a defendant in the case.) Oral arguments are scheduled for Tuesday.
LAW is a civil legal aid organization that serves people living in poverty.
To repeat a bit of background from my post on Wisconsin Manufacturers and Commerce amicus brief (and see that post for additional info).
Amazon's more than 1,000 gig drivers in the state accept their assignments through a phone app called Amazon Flex. They must sign an independent contractor agreement before they can work. They use their own vehicles and can use any delivery route they choose to get packages to their destinations. They generally are paid $18 for a two-hour block of delivering or $36 for a four-hour block. They are expected are to cover all their expenses, including car insurance, gas, and maintenance, from that amount. (Amazon made $9.9 billion in profits last quarter.)
There ends the repetitive part.
The state's policy statement for its unemployment compensation law, Lewison wrote, says that "Each employing unit in Wisconsin should pay at least a part of this social cost, connected with its own irregular operations, by financing benefits for its own unemployed workers."
"The principle that 'each employing unit' must participate in the program is consistent with the principle that no single employing unit should gain the advantage of escaping unemployment taxes to the disadvantage of its competitors," the LAW attorney said. "And yet employers, like Amazon Logistics, continue to try."
The unemployment program was established in 1932 in response to the economic devastation of the Great Depression, Lewison said. There was some doubt at first that the program would help boost the economy, but those doubts diminished over time.
In 1955, the U.S. Department of Labor said that unemployment insurance " 'helps to maintain purchasing power and to stabilize the economy,' ” Lewison wrote. And during the recent Covid-19 pandemic, "one bank described unemployment benefits as 'a lifeline to an economy in freefall as the pandemic struck' and another emphasized that UI 'helped to stabilize aggregate demand. ' ”
If the gig workers are denied unemployment benefits, "the effect will be to deny those workers, who are dependent upon Amazon Logistics for their earnings, the safety net that they need," she wrote. "It will also harm our overall economic recovery during times of recession or depression, by depriving workers of benefits that help stabilize spending."
Allowing firms that use gig workers to evade the unemployment insurance program, which levies taxes on the companies, would give them an unfair competitive advantage, she said.
"The court should heed Wisconsin’s history and statutory public policies and require Amazon Logistics to pay unemployment taxes," she said. "The people making deliveries for Amazon Logistics are employees entitled to unemployment insurance benefits that will allow them to weather hard times and contribute to the State’s economic stability."
The full brief in Amazon Logistics Inc. v Labor and Industry Review Commission, 22AP13, is here.
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