Healthcare, the nation’s fastest-growing industry, could be next in the push for laws to expand gig work.
A measure filed this week with the California attorney general’s office seeks to ask the state’s voters in November to classify nurses, dental hygienists, occupational therapists and other healthcare workers who secure work online or through apps as independent contractors. The proposed measure was submitted by a law firm that worked on Proposition 22, the record-breaking $200 million-plus initiative campaign funded by Uber Technologies Inc. UBER, +3.29%, DoorDash Inc. DASH, +7.89%, Lyft Inc. LYFT, +2.35% and Instacart that allowed those companies to bypass a state law that would have classified their drivers as employees instead of contractors.
California voters passed that law in 2020, but a state court declared it unconstitutional, a ruling that the gig companies are appealing while attempting to replicate the law in other states and nations. The state’s laws often become a model for other states, so there is a possibility of a similar trajectory with healthcare, which is expected to add more jobs than any other occupations this decade, growing to be the nation’s largest industry by 2030, according to the U.S. Bureau of Labor Statistics.
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The group behind the ballot initiative, which calls itself Californians for Equitable Healthcare Access, is not revealing its backers yet. If the initiative qualifies for the November ballot and is passed by voters, it would allow employers to treat healthcare workers as independent contractors if they secure assignments from digital platforms and satisfy several criteria, including that they largely determine their own schedules, are free to accept or reject work without penalty and can accept work from other platforms and sources.
“Healthcare professionals deserve to have flexibility to choose where and when to provide services, and facilities deserve to be able to find these independent healthcare providers quickly and easily to support their patients, particularly under changing conditions,” a spokesman for the group said.
The initiative is being introduced as venture capitalists pour millions of dollars into new healthcare-worker staffing platforms, some of which operate in a similar fashion to popular on-demand apps — and as hospitals struggle to retain nurses and other healthcare professionals who are burned out because of the coronavirus pandemic. Despite the healthcare staffing issues the COVID-19 pandemic has exacerbated, experts in labor history and the healthcare industry who spoke with MarketWatch called the initiative “a terrible idea,” “malicious” and “a huge union-busting move by the VC industry.”
“We do have a challenge with staffing problems [in healthcare],” said Laurel Lucia, director of the healthcare program at the UC Berkeley Labor Center. “I don’t see how this is the solution. Removing labor protections and benefits for healthcare workers will be bad for both workers and patients.”
‘Nursing… is fundamentally different from gig work’
At least one of the platforms that have sprung up to modernize the healthcare industry agrees. Trusted Health, a San Francisco-based startup that recently raised $149 million in venture funding, matches nurses to jobs all over the nation by having them create profiles on its website, offering them salary calculators, licensing guides and more.
But like many traditional staffing agencies, it takes nurses on as W-2 employees, not independent contractors, and offers them healthcare benefits, access to a 401(k) and more.
“Now more than ever, we feel an obligation and privilege to help ensure that nurses can sustain the work they’re doing,” said Sarah Gray, founding clinician at Trusted Health. “We need them and someone needs to be caring them.”
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Gray called travel and contingent nursing a “cornerstone” of the nursing industry and cited a Trusted Health survey of more than 3,300 nurses that found 71% of them wanted scheduling flexibility. But she added that wherever or however nurses work, they should have access to “robust” benefits.
“Nursing… is fundamentally different from gig work,” she said. “There’s a high barrier to entry. It’s a professional career, and in order to sustain that career and provide high-quality care, nurses need to have that proper care themselves in the form of employee benefits.”
Besides the threat of the gig-economy model itself, Gabriel Winant, a history professor at the University of Chicago and author of “The Next Shift: The Fall of Industry and the Rise of Healthcare in Rust Belt America,” called the proposed initiative “one of the most malicious things I’ve ever seen.”
Winant said the for-profit model in hospitals that rely on not running at full capacity at all times is causing the understaffing problems we’re seeing now, and says this type of law would make it even worse.
“It’s already too understaffed, already strained… the attempt to run for-profit has created a lot of problems,” he said. “What the initiative is saying is market incentives haven’t gone far enough.”
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Eroding protections and benefits of the nursing profession, Winant said, would affect families and communities that rely on mostly women and people of color who do those jobs. And he said the effects could trickle down and make the situations of lower-paid healthcare workers, such as nursing assistants and home-health aides, even more precarious.
However, Winant compared what happened with the campaign by Uber and others in California and said he is skeptical this proposed initiative will be successful: “Prop. 22 didn’t target a group of workers who were unionized and as trusted as nurses,” he said.
Renée Saldaña, a spokeswoman for the SEIU-United Healthcare Workers West, a union of more than 100,000 healthcare workers, patients and activists in California, said “this proposed initiative seems like the worst possible idea in the middle of a pandemic. It would further devalue the jobs of the essential front-line caregivers we depend on.”
Saldaña said about 98,000 of SEIU-UHW’s represented members in the state, which include respiratory care practitioners, nursing assistants, dietary and environmental services staff, optometrists and more, are classified as employees.
Traveling nurses already have flexibility — and benefits
Melissa McDonald has been a traveling nurse for more than a decade and has worked for 30 hospitals across the country. She has a per-diem, or as-needed, staff job in Oakland, Calif., but also finds additional work through larger agencies that use commissioned recruiters and at newer platforms like Trusted Health, Go RN and others.
McDonald says she likes being a traveling nurse because she has “commitment issues” and prefers to stay out of hospital politics. She has been a W-2 employee for her assignments, and said if traveling nurses were to become independent contractors, they should know what they are facing.
“I’ve had friends who have ended up owing $20,000 to $30,000 in taxes” because they didn’t plan correctly, McDonald said. She added that an independent-contractor nurse would also have to carry malpractice insurance and “make sure you’re getting compensated as you should, because you’re going in with no protections.”
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Catherine Fisk, a professor at UC Berkeley who teaches labor and employment law, said the failure to carve out an exemption for nurses to a California law that determines when a worker can be considered an independent contractor, is likely an impetus behind the push to bring the issue before voters. (Assembly Bill 5 is the law that Uber and the other leading gig companies attempted to sidestep with Prop. 22.)
“Uber for nurses?” she said. “What a terrible idea.”
Fisk added: “What Prop. 22 did was shift all the risks of workplace injury/illness, slack demand, unemployment, etc., from the companies to the workers. And there’s no reason to believe this will be any different.”
Veena Dubal, a law professor at UC Hastings whose research focuses on law, technology and work, said she sees the proposed initiative as “a huge union-busting move by the VC industry.”
“Because of VC money, they have the ability to make it look really attractive in the beginning,” Dubal said. “A nurse might say ‘I’m tired of my 12-hour shifts, I’ll quit my job at the hospital.’ These companies will offer large amounts of money upfront… then trap people into this lifestyle.”
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The lawyer from the firm who’s listed in the filing of the proposed initiative did not return a request for comment. The firm, Nielsen Merksamer, earned at least $2 million for its work on the Proposition 22 campaign in California, according to campaign finance records. The firm also is representing the Protect App-Based Drivers & Services Coalition, the group backed by Uber, Lyft and the other big gig companies, in its appeal of a judge’s decision last year declaring Proposition 22 unenforceable.
Lobbying records filed with the state show that among the law firm’s healthcare clients are health insurance providers, industry associations and companies that serve hospitals. The spokesman for the campaign said he could not make the two proponents who signed the filing — whom he referred to as “concerned citizens” — available to talk with MarketWatch, which was unable to independently contact them.
Californians recently sided with the healthcare industry at the polls. In 2020, they voted against an initiative to require a doctor and nurse at dialysis clinics when patients are being treated. That was the second time unions tried to get voters to regulate dialysis clinics. They were outspent by DaVita Inc. DVA, +1.34% and Fresenius Medical Care FMS, +0.98% — two of the nation’s biggest for-profit dialysis providers. According to filings with the state, a similar initiative could appear on the ballot again in November.