Proposal to classify certain gig workers as contractors advanced

Lawmakers gave first-round approval to a bill Feb. 4 that would codify ride-share drivers as independent contractors in state law.

LB229, introduced by Syracuse Sen. Bob Hallstrom, would add workers who use technical applications for marketplace network platforms, such as Uber and Lyft, to an existing list of workers who are classified as independent contractors and are excluded from the state’s Employment Security Law.

Ride-share drivers already are considered independent contractors in Nebraska, Hallstrom said, but LB229 would solidify that classification in state statute.

“The app-based work available through the Uber platform is critical for those who want to work but might not have the ability to handle a traditional nine-to-five job,” Hallstrom said. “Drivers on ride-share platforms are independent [and] choose if, when, where and how long they work.”

Speaking in support of LB229, Elkhorn Sen. Tony Sorrentino pointed to a six-factor test the federal Department of Labor uses to determine whether an individual is an employee or independent contractor, which includes a worker’s ability to negotiate, among other factors.

Applying that test indicates that ride-share drivers should be classified as independent contractors, he said.

“Opposing LB229 could easily be considered an intentional thumbing of the nose to the true facts of the federal guidance and legislative intent adopted by the Department of Labor,” Sorrentino said.

North Platte Sen. Mike Jacobson agreed, saying the proposal would ensure ride-share drivers are able to continue providing an essential service to Nebraskans. Classifying ride-share drivers as employees likely would destroy the ride-share business due to increased costs, he said.

“We’re curbing free enterprise if we try to require that they all be employees as opposed to the independent contractors that they are,” Jacobson said.

Omaha Sen. Terrell McKinney spoke in opposition to LB229. He said the claim by Uber that classifying ride-share drivers as employees would destroy its business is evidence that the company survives by denying fair wages and benefits to its workers.

“Uber’s profitability model relies on exploiting workers,” McKinney said. “[Their] financial struggles are more tied to its unsustainable pricing model and investor-driven growth strategy than worker classification.”

Sen. Megan Hunt of Omaha expressed concern that classifying ride-share drivers as independent contractors would take away their ability to unionize and negotiate benefits.

Workers already are battling corporate interests and increased privatization of services in our society, she said, and lawmakers shouldn’t make it even harder for workers to advocate for themselves.

“If ride-share drivers try to form a union, there is no guarantee they will win,” Hunt said. “But workers in Nebraska deserve the right to try, without outside intervention from the government preventing them from doing so.”

LB229 advanced to select file 33-12.