Lisa McCormick says it is time to update work rules & tax laws

The concept of overtime pay, just like the minimum wage, didn’t exist in federal law until President Franklin D. Roosevelt pushed for New Deal labor protections in the wake of the Great Depression.

New Jersey progressive advocate Lisa McCormick says it is time to revisit this class of laws because changing interpretations and evolving conditions have allowed gig economy billionaires to maintain low prices by relying on labor schemes that offload the cost of unemployment benefits, healthcare, and even food stamps for their employees onto the public social safety net.

The average gig economy driver’s wages are just $9.21 per hour, with zero benefits, said McCormick, who believes government regulations need an update to require that employers assure as far as possible, safe and healthful job conditions for every working man and woman in the nation.

"The minimum wage is slowing rising to $15 per hour, but gig economy drivers are being left behind while absorbing insurance, fuel and equipment costs," said McCormick, who earned almost four out of ten votes in New Jersey's 2018 Democratic primary election, when she challenged US Senator Bob Menendez, the hawkish chairman of the Senate Foreign Relations Committee.

McCormick blames Menendez, in large part, for failing to exert his political power on behalf of those Americans in danger of being exploited by emerging technology companies that bend or break the rules because they profit by failing to pay workers the full wages to which they are legally entitled.

"Congress enacted the Fair Labor Standards Act (FLSA) in 1938 to eliminate 'labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers'  but the heart of the New Deal was cut out of America when the nation adopted a set of policies known as ‘Reaganomics' beginning in 1981," said McCormick.

McCormick said classifying a worker as an independent contractor is one way to escape the employer’s responsibility under the FLSA, which establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees.

"A full-time employee today is four times less likely to earn time-and-a-half income than in the 1970s because there has been a 40-year effort by big business and elected officials to deny Americans fair pay for their labor," said McCormick. "More than $15 billion with of wages are stolen from workers each year in the United States, whether by shorting paychecks, denying overtime or exploiting gig economy loopholes, but that amount of theft rivals the $16.4 billion value of all property crime nationwide in 2018.”

"In 1975, more than 60 in every 100 salaried workers could earn overtime pay. By 2020, just 15 percent of workers were eligible for time-and-a-half during excess hours," said McCormick. "Politicians of both parties failed to increase the maximum salary eligible for overtime enough to keep up with rising living costs over those decades."

"There's no comfort for victims knowing the criminal who robbed you was wearing a white collar and politicians like Senator Bob Menendez should recognize these crooks in boardrooms and corporate offices because it takes one to know one," said McCormick.

Congress should also review existing job safety laws and consider beefing up enforcement capabilities at the Occupational Safety and Health Administration, in addition to updating statutes that define employer responsibilities at companies that inappropriately classify workers as independent contractors and expanding the number of employees who are covered by overtime pay requirements, according to McCormick.

“Companies like Uber and Lyft are taxing personal auto liability coverage by slipping their employees into excess hours behind the wheel,” said McCormick, who explained that “expanding the number of motor vehicle accidents and the number of plaintiffs engaged in will be driving car insurance rates higher before you know it.”

“Shifting responsibility for insurance liability from workers’ compensation coverage to personal auto policies is an example of the gig economy’s corporate secret to success but in simple terms, it is stealing,” said McCormick. “The same employers often misclassify workers as independent contractors, in order to escape their duty to pay Social Security taxes, unemployment insurance premiums, and other costs of doing business, but every time they duck responsibility for a cost, someone else has to pick up that tab.”

“Government has a responsibility to make sure the economy works for everyone by imposing and enforcing rules that require employers to share prosperity with the workers who make it possible,” said McCormick. “American citizens should elect leaders who are prepared to guarantee health care, education, and labor rights because these are the tangible manifestations of liberty, security, prosperity, and justice for all upon which our nation was founded.”

“Too often, gig economy entrepreneurs have found ways to skirt their obligations and offload employee costs on taxpayers, in the form of public assistance, health insurance, and even food stamps, or on other industries where managers most likely conduct responsible business practices,” said McCormick. “These unethical profiteers should not be permitted to get a free ride on personal auto policies when they should pay for commercial insurance or soak up extra profits by stealing welfare benefits, but that is exactly what they do.”

"It should be patently illegal to reap massive corporate profits by evading costs by pushing them onto workers through misclassification," said McCormick. "Workers who are misclassified lose out on overtime, paid sick leave, and unemployment insurance. The false designation of employees as independent contractors is nothing more than wage theft and it should be prohibited and punished."