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» VISIT US ONLINE @ DSNEWS.COM 71 economy. Since 2010, we have seen a loss in job security and pensions. In its place, workers hold multiple 1099 jobs. So long as PPBOs' clients (financial institutions and government agencies) require adherence to strict performance standards, they will remain vulnerable to penalties under this new legislation. Laws such as A.B. 5 will presume workers are employees, entitled to all protections and benefits, unless they meet strict criteria as truly independent contractors. THE GIG ECONOMY IMPACT e focus on the gig economy has obscured the more widespread impact of the new law in traditional businesses, perhaps such as ours, where workers have been misclassified for years. Hundreds of thousands of construction workers, janitors, truckers, and others now paid as independent contractors may be entitled to earn minimum wage and overtime, receive unemployment insurance and family leave, and have bargaining rights. is new economy is allowing independent contractors to organize, creating an opportunity for states like California to establish a mechanism for Uber and Lyft drivers to unionize under the auspices of a state labor board, which could be extended to oversee union activity. e result may have crippling effects for PPBOs and their business model. At the 2019 Five Star Conference in Dallas, a panel discussed the strengthening of vendor relations in today's market, but there was no clear mandate as to what this means. Taking a "wait and see" approach will only spell disaster. If we wait to see the effect, it will already be too late. We call upon all property preservation leaders to join together and draw a roadmap to guide the industry through this newly changing labor landscape. It has been estimated that, in order to comply with the new law in California, which takes effect on January 1, 2020, it would cost Uber $507 million and Lyft $290 million. Uber, which insists that its drivers don't qualify as employees, has said it will force them to make claims for employment status individually. Together, these companies have committed $90 million to financing a 2020 ballot initiative to overturn the law, a quest that faces dubious prospects. What the rideshare industry is considering (and what PPBOs should start thinking about) is giving drivers greater benefits. Even after signing the bill, California's governor continues to attempt to forge some compromise that might create a third category of worker—not a traditional, full-time employee, but rather an independent worker with certain enforceable rights and benefits. All of these scenarios suggest a rethinking about the role states play in protecting workers' rights and economic security. As union membership declined, states have been the mechanism to ensure benefits including higher minimum wages, access to affordable health care, and portable retirement plans. Unless immediate attention is given to this problem, our industry may face huge losses that will have broad ramifications. A coalition of labor groups in New York has already proposed legislation modeled on the A.B. 5, and Gov. Andrew Cuomo has indicated support, saying he "does not like to lag California in anything." PPBOs can create practical and sustainable independent contractor business models by re- examining those relationships. Such efforts can substantially increase their level of compliance and decrease or even eliminate misclassification exposure. For some companies, the quickest way is to reclassify independent contractors as employees or redistribute them with staffing companies. For those companies that wish to retain their independent contractor business model, compliance may come in the form of allowing the restructuring, re-documenting, and re-implementing of their independent contractor relationships consistent with applicable federal and state laws. In the end, if our industry is to remain profitable and continue to service banks and the government, we must lead the way by changing how we staff contracts. We propose that together, as an industry, we dedicate our talents and resources towards establishing practices that will act as a successful business model in the face of newly changing labor laws in the 21st century. If our industry is to remain profitable and continue to service banks and the government, we must lead the way by changing how we staff contracts.

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