California passes bill strengthening protections for gig workers
Uber has already pushed back against the new bill, saying it would not treat its drivers as employees under the California bill.
Gig workers in California will get a boost from AB5, a new bill passed by the California Senate and backed by Gov. Gavin Newsom that will make it tougher for companies to classify them as independent contractors instead of as employees.
A Reuters report says that ride-hailing companies like Uber and Lyft will feel the brunt of the legislation, which “would codify a 2018 California Supreme Court decision, Dynamex Operations West Inc v. Superior Court, that set out a new standard for determining whether workers are properly classified as independent contractors.” The court decision found that state wage laws cover workers as employees when the company controls their work or when they are integral to its business.
Uber has already pushed back against the new bill. Tony West, Uber’s chief legal officer, said in a news conference that the ride-hailing company would not treat its drivers, who are independent contractors, as employees under the California bill, according to a report from The New York Times. He said that drivers were not a core part of the company’s business and could maintain their independent status when the measure goes into effect as state law on Jan. 1.
Companies push back
Uber, Lyft and DoorDash have said they will spend $90 million to back a ballot referendum in 2020 aimed at exempting them from the law, which would have a far broader reach than just California due in part to the state’s large population and workforce.
“By approving AB5, the California legislature solidified our state’s position as the national leader on workplace rights, setting the standard for the rest of the country to follow,” the California Labor Federation said in a statement, while Lyft issued a statement saying, “We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.”
The legislation, which passed the Senate in a 29–11 vote, still has to go back to the Assembly for a “concurrence vote,” expected to happen by the end of the week, and Newsom has said he will sign it. It also has broad support outside the state, from several Democratic presidential candidates including Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT) and Kamala Harris (D-CA).
Businesses dependent on so-called gig workers are firmly opposed to such a measure since it could end up completely transforming their business models by providing employee status —and pay and benefits — to workers currently classed as independent contractors.
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This article first published on our sister site, BenefitsPRO.