PayUp Legislation

Sponsors | Councilmembers Lisa Herbold and Andrew Lewis

Background

“App-based work,” or the work that independent contractors do, such as on-demand food delivery, pet sitting, or grocery shopping is one of the fastest growing job sectors in our economy. This work has proven to be invaluable to many and it is important to protect the flexibility that app-based work provides. However, we need to ensure their workers are paid adequately.

Many app-based workers are underpaid, and sometimes, after expenses such as mileage, vehicle maintenance, and other business expenses are considered, workers may even lose money on a job. It’s long past time that these workers receive Seattle’s minimum wage plus compensation for business expenses including the miles they travel as part of their jobs.

App-based companies are reporting unprecedented growth and billions in revenue:

DoorDash reported revenue at $4.89 billion in 2021 which is up 69% from 2020.
Uber Eats reported $5.8 billion in revenue for the fourth quarter of 2021, beating their own estimates of $5.36
Instacart’s 2021 revenue grew 10% year-over-year to $1.65 billion. The company’s valuation is $24 billion, up from $17.7 billion a few months prior. It is rumored that it will debut and IPO in 2022.

PayUp Policy Package

The PayUp policy package is a group of bills being drafted and introduced by Councilmembers Lisa Herbold and Andrew Lewis that work to address the many issues facing app-based workers. The content below will show you the details of each proposal as the bills are introduced. More information will be added to this section as the bills progress.

Bill #1

Minimum Payment / Transparency / Flexibility

Minimum Payment

Provide or ensure payment of minimum wage plus expenses with a per-minute and per-mile floor for the engaged time necessary to perform each offer. minimum payment calculation

Transparency

Provide workers with information needed to make informed choices about which offers to accept and to verify compliance with minimum pay requirements.

Provide customers with information on the nature of charges, including amounts paid to workers and retained by the company.

Provide OLS with regular and routine access to aggregated and disaggregated company records.

Flexibility

Protect worker’s flexibility, including the right to freely choose jobs and hours, while maintaining companies’ provision of services to customers and third-party businesses.

Video Summaries

For more information visit https://t.co/MGhYxlH11l pic.twitter.com/kBvf53bXsA
— Lisa Herbold (@Lisa_Herbold) April 15, 2022

While many app-based workers are making less than minimum wage, app-based companies are making record profits. It’s past time we give app-based workers the respect and protections that every other worker in Seattle is afforded. This #MayDay, it's time to pass PayUp. pic.twitter.com/dDU627l4fz
— Lisa Herbold (@Lisa_Herbold) May 1, 2022

Legislation

Read the Bill

Bill #2

Restroom Access

Bill #3

Anti-Discrimination

Bill #4

Background Checks

Bill #5

Deactivation

Bill #6

Advisory Board

Timeline

The Council has been meeting with a large group of stakeholders for nearly a year, starting in June 2021. As of April 2022, there have been 12 of these large stakeholder meetings. Stakeholders have included a wide range of companies that would potentially be impacted like DoorDash, Uber Eats, Rover Instacart, and others; independent contractors who work for those companies; Councilmembers and others.

Large Stakeholder Meetings

June 9, 2021 – Introduction and general overview of policy proposal
June 15, 2021 – Discussion of coverage of the policy proposal
June 22, 2021 – Discussion of pay structure
June 29, 2021 – Discussion of transparency and flexibility
July 6, 2021 – Discussion of deactivation
July 13, 2021 – Discussion of background checks
July 20, 2021 – Discussion of restroom access
July 27, 2021 – Discussion of anti-discrimination and reasonable accommodations
August 3, 2021 – Discussion of enforcement
August 10, 2021 – Discussion of advisory board

The Council paused stakeholder meetings during the Council’s budget process. The Office of Labor Standards conducted a review and proposed changes to the first bill which includes Minimum Payment, Transparency, and Flexibility. Additionally, stakeholders continued to meet amongst themselves.

January 25, 2022 – Shared new draft legislation
February 1, 2022 – Discussed changes included in drafts shared in the 1/25/22 meeting

Additional stakeholder meetings continue to take place separately with subgroups including marketplace-based companies, and on-demand delivery companies to address their unique concerns.

Committee Meetings

July 13, 2021
- Central Staff presentation
- Video link
September 14, 2021
February 8, 2022
April 12, 2022
April 26, 2022
- Central Staff memo
- Video link

FAQs

Expand All Items

What are examples of companies covered by this legislation?

Uber Eats, DoorDash, GrubHub, Caviar, Task Rabbit, Rover, Instacart, GoPuff, and Shipt are all examples of companies that would likely be covered by this legislation.

Did the state legislature recently pass a law that preempts the City of Seattle from doing anything about this on the local level?

In 2022 the Washington State Legislature passed HB 2076 which applies specifically to Transporation Network Companies (TNCs). TNCs are companies such as Uber and Lyft. While a company like Uber also does on-demand food delivery, HB 2076 applies strictly to the passenger transportation side of their business. HB 2076 does not provide protections for on-demand delivery workers like the protections in the PayUp policy package.

Do people who work for these gig work companies make less than minimum wage?

Some workers, after taking into account business expenses and miles driven, do make below Seattle’s minimum wage. This is why passing these protections is so important. Because these workers are not hired as W2 employees they are not subject to the City’s minimum wage law.

Will this legislation result in higher prices for consumers?

Living and working in the city is expensive and all workers should have an opportunity to earn a minimum wage. Gig companies are reporting billions in revenue, their workers make that profit possible and they should be able to earn at least a minimum wage while their companies are generating so much wealth.

Shouldn’t this legislation undergo a more rigorous process that engages all stakeholders?

As shown above, the Council began stakeholder conversations in June 2021 and have met over a dozen times while also holding several committee meetings on each proposed bill in the package.

Who supports this legislation?

This legislation is supported by a broad coalition of workers and worker advocates such as Working Washington, Seattle Restaurants United, OneAmerica, Puget Sound Sage, Somali Community Services, SEIU 775, SEIU 6, Transit Riders Union, and the Washington Low Income Housing Alliance.

Has any other city or state implemented similar laws?

Other jurisdictions are considering similar laws. NYC, for example, recently passed a suite of legislation establishing multiple workplace protections for third-party food delivery workers, including but not limited to requirements for minimum per trip payments (the Department of Consumer and Worker Protection will issue rules establishing the standards for minimum trip payments by January 1, 2023); disclosure of gratuity policies; and agreements between online third-party food delivery services and food service establishments to provide toilet access to food delivery workers

Is this bill a one-size fits all approach to the different gig companies?

No, the proposal recognizes there’s a difference between on-demand delivery companies and marketplace network companies with different approaches to each.

Shouldn’t the City commission a study to inform the policy?

It is well known that these workers often make below the Seattle minimum wage. When the City considered and passed similar legislation to protect Transporation Network Company (TNC) drivers we commissioned a study by the Institute for Research on Labor and Employment out of the University of Berkeley they found that after expenses workers netted only $9.73 an hour.

Furthermore, these workers – considered front line workers – need protections now, they have operated for years below the minimum wage. They cannot continue to wait for these protections.

Media Coverage

PayUp advocates protest outside city hall