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REPUBLICA PRESS
Your Business & Political News Source

Pensions and Retirement Plans

In a First, Uber Agrees to Classify British Drivers as ‘Workers’

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LONDON — For years, Uber has successfully deployed armies of lawyers and lobbyists around the world to fight attempts to reclassify drivers as company workers entitled to higher wages and benefits rather than lower-cost, self-employed freelancers.

Now the ride-hailing giant is retreating from that hard-line stance in Britain, one of its most important markets, after a major legal defeat.

On Tuesday, Uber said it would reclassify more than 70,000 drivers in Britain as workers who will receive a minimum wage, vacation pay and access to a pension plan. The decision, Uber said, is the first time the company has agreed to classify its drivers in this way, and it comes in response to a landmark British Supreme Court decision last month that said Uber drivers were entitled to more protections.

The decision represents a shift for Uber, though the move was made easier by British labor rules that offer a middle ground between freelancers and full employees that doesn’t exist in other countries. That middle ground makes it unclear whether Uber will change its stance elsewhere. More labor battles are coming in the European Union, where policymakers are considering tougher labor regulations of gig-economy companies, as well as in the United States.

employee,” which includes paternity and maternity leave and severance pay if dismissed, among other benefits.

Britain’s minimum wage for people over 25 years old will be 8.91 pounds, or about $12.40.

For vacation, drivers will receive 12 percent of their earnings, paid out every two weeks, a calculation set by the government.

Uber did not disclose how much the reclassification of British drivers would increase its costs, but it said in a regulatory filing that it did not alter the company’s target of becoming profitable this year. London is one of Uber’s five largest markets, and Britain accounts for about 6.4 percent of the company’s total gross bookings.

Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, put pressure on other ride-hailing companies to adopt similar policies in Britain.

“Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives,” he said in the statement.

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In First, Uber Agrees to Classify British Drivers as ‘Workers’

by

LONDON — For years, Uber has successfully deployed armies of lawyers and lobbyists around the world to fight attempts to reclassify drivers as company workers entitled to higher wages and benefits rather than lower-cost, self-employed freelancers.

Now the ride-hailing giant is retreating from that hard-line stance in Britain, one of its most important markets, after a major legal defeat.

On Tuesday, Uber said it would reclassify more than 70,000 drivers in Britain as workers who will receive a minimum wage, vacation pay and access to a pension plan. The decision, Uber said, is the first time the company has agreed to classify its drivers in this way, and it comes in response to a landmark British Supreme Court decision last month that said Uber drivers were entitled to more protections.

The decision represents a shift for Uber, though the move was made easier by British labor rules that offer a middle ground between freelancers and full employees that doesn’t exist in other countries. That middle ground makes it unclear whether Uber will change its stance elsewhere. More labor battles are coming in the European Union, where policymakers are considering tougher labor regulations of gig-economy companies, as well as in the United States.

employee,” which includes paternity and maternity leave and severance pay if dismissed, among other benefits.

Britain’s minimum wage for people over 25 years old will be 8.91 pounds, or about $12.40.

For vacation, drivers will receive 12 percent of their earnings, paid out every two weeks, a calculation set by the government.

Uber did not disclose how much the reclassification of British drivers would increase its costs, but it said in a regulatory filing that it did not alter the company’s target of becoming profitable this year. London is one of Uber’s five largest markets, and Britain accounts for about 6.4 percent of the company’s total gross bookings.

Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, put pressure on other ride-hailing companies to adopt similar policies in Britain.

“Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives,” he said in the statement.

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Rescue Package Includes $86 Billion Bailout for Failing Pensions

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Tucked inside the $1.9 trillion stimulus bill that cleared the Senate on Saturday is an $86 billion aid package that has nothing to do with the pandemic.

Rather, the $86 billion is a taxpayer bailout for about 185 union pension plans that are so close to collapse that without the rescue, more than a million retired truck drivers, retail clerks, builders and others could be forced to forgo retirement income.

The bailout targets multiemployer pension plans, which bring groups of companies together with a union to provide guaranteed benefits. All told, about 1,400 of the plans cover about 10.7 million active and retired workers, often in fields like construction or entertainment where the workers move from job to job. As the work force ages, an alarming number of the plans are running out of money. The trend predated the pandemic and is a result of fading unions, serial bankruptcies and the misplaced hope that investment income would foot most of the bill so that employers and workers wouldn’t have to.

Both the House and Senate stimulus measures would give the weakest plans enough money to pay hundreds of thousands of retirees — a number that will grow in the future — their full pensions for the next 30 years. The provision does not require the plans to pay back the bailout, freeze accruals or to end the practices that led to their current distress, which means their troubles could recur. Nor does it explain what will happen when the taxpayer money runs out 30 years from now.

said last week.

according to the agency itself. That would leave the roughly 80,000 other union retirees whose pensions the agency now pays without their payouts.

The new legislation changes that. It calls for the Treasury to set up an $86 billion fund at the pension agency, using general revenues. The agency would be required to keep the money separate from the funds it uses for normal operations. It would use the new money to make grants to qualifying pension plans, allowing them to pay their retirees. The Congressional Budget Office estimated that 185 plans were likely to receive assistance, but as many as 336 might under certain circumstances.

pensions that were cut in a 2014 initiative that tried to revive troubled plans by trimming certain people’s pensions. The stimulus bills — there is a House version and a Senate version that have minor differences — call for the affected retirees to get whatever money was withheld over the past six years.

The legislation requires the troubled plans to keep their grant money in investment-grade bonds, and bars them from commingling it with their other resources. But beyond that, the bill would not change the funds’ investment strategies, which are widely seen as a cause of their trouble.

For decades, multiemployer pensions were said to be safe because the participating companies all backstopped each other. If one company went under, the others had to cover the orphaned retirees. Because they were considered so safe, multiemployer pensions never got much oversight.

While companies that run their pension plans solo must follow strict federal funding rules, multiemployer plans do not have to. Instead, the companies and unions hammer out their own funding rules in collective bargaining. Both sides want to keep the contributions low — the employers to reduce labor costs, and the unions to free up more money for current wages. As a result, many of the plans have gone for years promising benefits without setting aside enough money to pay for them.

In hopes of making up for the low contributions, the plans often invest unduly aggressively for their workers’ advancing age. In bear markets they lose a lot of money, and they can’t ask the employers to chip in more because the employers are often struggling themselves.

The new legislation does nothing to change that dynamic.

“These plans are uniquely unable to raise their contributions,” said Mr. Naughton, whose clients included multiemployer plans when he was a practicing actuary. “When things go well, the participants get the benefits. If things go badly, they turn to the government to make it work.”

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Eyeing Re-election, Macron Walks a Tightrope Above Swirling Crises in France

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PARIS — In a recent meeting with a handful of foreign correspondents, President Emmanuel Macron of France philosophized for 100 minutes on the record, without notes. He dotted his conversation with Americanisms — “game-changer,” “honest brokers” — that must have had de Gaulle turning in his grave. He dissected French “universalism.” He mused on colonial history. He identified hatred, turbocharged by social media, as “a threat to democracy itself.”

The performance was typical of Mr. Macron, and unusual for any head of state, the equivalent of tightrope walking without a net. Yet, the many words revealed little of the man himself. Four years into an often tumultuous term, facing an election next year, Mr. Macron remains an enigma to even his own country.

Backed by the left in 2017, Mr. Macron now has more support on the right. Once a free-market reformer, he now extols the role of the state and protection “at any cost” in the age of Covid-19. Once the leader of a freewheeling movement that swept away old political hierarchies, he now sits comfortably at the pinnacle of power, his authority accentuated by terrorism and pandemic.

“With Macron we have gone to the limit of presidential domination in the Fifth Republic,” said Alain Duhamel, a political commentator.

Islamist separatism,” which Mr. Macron believes undergirds recurrent domestic terrorism.

At a time when identity politics and the anger of some marginalized Muslim immigrants have raised questions about France’s ability to embrace the diversity of its society, Mr. Macron wants to preserve and broaden a French universalism much criticized for disguising forms of exclusion, particularly for Muslims.

“Our universalism is not in my view a doctrine of assimilation,” he told the foreign correspondents. “It is not the negation of differences. I believe in pluralism within our universalism.”

In its subtle parsing, its attempted reconciliation of the irreconcilable, the finesse was very Macron. France has tended to view its model as assimilationist in opposition to American multiculturalism. So, this was a departure. But if pluralism “is not multiculturalism,” what does it look like?

Mr. Macron went on to speak of the millions of French people who are descended from migrants, whose identity and dreams are “totally France” but whose families may have “other languages or other dreams.”

All this, he said, “must be recognized as an opportunity”; and France must understand that in recent years “our integration policies have not worked” and that this failure has been felt most acutely by those who have “a different first name or a different skin color.” Those, he added, who “are different from the majority — I do not like the word minority.”

Like “multiculturalism,” “minority” is a no-no in France, because in its self-image this is a nation of undifferentiated citizens drawn to an ennobling, universal idea. If Mr. Macron can indeed reinvigorate this idea through celebration of diversity, he will have broadened the meaning of Frenchness.

On one subject, Mr. Macron has never wavered: the defense of Europe’s great postwar push for integration to assure peace. He will carry the banner of Europe into his election campaign, at a time when France will have the rotating presidency of the European Union for the first time since 2008.

His priority will be the pursuit of a “sovereign” Europe, with the technology and military capacity to stand up for the values — liberty, pluralism, the rule of law — that he believes define it.

That was courageous in 2017, with the fervor of Brexit and former President Donald Trump’s anti-Europe rhetoric raging; and perhaps, faced by Ms. Le Pen, it is no less so today.

In a time of rising authoritarianism, the French president, like Ms. Merkel, has been a significant democratic counterweight, a strong supporter of multilateralism and free societies.

Mr. Duhamel, the political commentator, identified Macronism as “a civil and democratic Bonapartism, where everything goes up to the leader, and there is a quest for disruption and reform, through the whip.”

And does France, at once a conservative and revolutionary society, like this style enough to give the mystery man five more years?

“The election will be decided between two negative emotions, hate and fear,” Mr. Duhamel sighed. “If hate prevails in May next year, Mr. Macron will be defeated. If it’s fear, after a convulsive period, faced by an uncertain future, then he will win.”

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