Uber drivers are declared employees in California. AT&T gets fined for slowing unlimited data service, and Microsoft shuffles the upper management deck. Here are the top stories for June 18, 2015.
Jobless Claims Just Keep Dropping
The Labor Department Thursday said the number of Americans filing new claims for unemployment benefits fell by 12,000 to a seasonally adjusted total of 267,000 for the week ending June 13. That marked the 15th consecutive week claims held below the 300,000 mark which is considered a sign of a firming labor market.
Interest Rates Still on Hold
It looks like the Federal Reserve is going to raise interest rates later this year, but it is not yet a done deal. Following the meeting of the Federal Open Market committee Wednesday, Fed Chair Janet Yellen noted the improvement in the labor market and the economy, and hints were dropped that two quarter-point rate increases could occur later this year. But those hints also included the possibility that there will be a slowed rate of increase in 2016. The projection is that the benchmark rate will rise to 0.625 percent in 2015, but that the 2016 rate will go no higher than 1.625 percent. Yellen did note that the credit rate tightening will be a gradual one and that increases would not occur mechanically.
FCC Fines AT&T
The Federal Communications Commission Wednesday proposed a fine of $100 million against AT&T for misleading unlimited-data customers about possible slowdowns in download speeds. AT&T says it will “vigorously dispute” the fine. The FCC says AT&T offered what it called unlimited data plans without sufficiently informing its customers that their Internet speeds could be slower than normal in some cases, a practice known in the industry as “throttling”. The FCC has previously fined prepaid provider TracFone with the same violation and forced that company to pay $40 million in fines. “The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure,’’ FCC Chairman Tom Wheeler said in a statement.
Uber Takes a Hit
In a decision that could have wide-ranging implications for all business startups, the California Labor Commission has decided that Uber drivers are employees of the company, and not freelance contract providers. The ruling that came down in San Francisco this week could force startups to provide health and compensation benefits and other benefits to its service providers, creating far more employee-related costs. The court said Uber is involved in the selection of drivers to a degree that makes them employees and not freelance contractors. The decision only affects Uber drivers in California but can be seen as a precedent for service in other states and the world.
Your Huge Carry-On is Still OK
Airlines for America, an industry trade organization for the leading U.S. airlines, said Wednesday there is no support for the smaller carry-on bag initiative proposed by the International Air Transport Association. The small carry-on initiative was named Cabin OK and called for guidelines that would be adopted by all airlines and ease the crowding in overhead bins. The trade organization said airlines are trying to create larger overhead bins in future aircraft to relieve the problem. The IATA said Wednesday it would reassess its proposal in light of the reaction from the airlines.
Microsoft Reorganizes Upper Management
Three top employees of Microsoft Corp. will depart the company in a reshuffling of assignments under CEO Satya Nadella. Former Nokia Corp chief Stephen Elop, Kirill Tatarinov and Eric Rudder will “leave Microsoft after a designated transition period,’’ according to a company release. The departure of Elop is a sign the company is resetting its struggling smartphone hardware business, which was supposed to get a jump start with the purchase of Nokia’s handset business. Microsoft’s hardware device business, which Elop ran, will now be folded into a new division with Microsoft’s operating systems group. That new division will be headed by executive vice president Terry Myerson.