California adds wage, benefit protections for gig workers

Clay Curtis
September 21, 2019

Following protests from rideshare drivers, California Governor Gavin Newsom signed a bill to require firms such as Uber and Lyft to treat their contract drivers as employees.

Lyft stresses that it would have as many as 300,000 fewer drivers in California if it were required to classify drivers as employees because employee-drivers would be slated to work in scheduled shifts.

AB 5 establishes an "ABC test" to prove if contractors are doing work outside the company's usual business, not contributing to the core part of it.

"While I personally disagree with this delay, I'm willing to allow the newspaper industry the additional year to comply if it means those delivery drivers and almost a million other misclassified workers are provided the minimum wage, benefits and workplace rights of Assembly Bill 5", Gonzalez said in a statement issued last week. It could upend the business models of companies that depend on armies of independent contractors, who aren't guaranteed employment protections like minimum wage and overtime.

Uber says forcing its drivers to become employees could compromise a service that relies on flexibility.

The new law goes into effect on January 1st. The company says it also offered paid sick leave and paid family leave for drivers who spend in excess of 20 hours per week in booked rides, though it did not specify what additional requirements would apply to drivers who elect to have injured worker and paid leave benefits.

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"Looking to the future, we recognise the many attempts by Lyft and Uber to avoid compliance with the law and ignore the voices of drivers".

But the state's Republican Caucus fired off a tweet contending that Newsom signed "California's largest anti-free market legislation" and that it could effect some two million jobs.

"We've engaged in good faith with the Legislature, the Newsom administration and labor leaders for almost a year on this issue, and we believe California is missing a real opportunity to lead the nation by improving the quality, security, and dignity of independent work", wrote Tony West, Uber's chief legal officer, after AB 5 passed.

Governor Gavin Newsom said it was "landmark" legislation that was a first step toward enabling more workers to unionize.

"We believe California is missing a real opportunity to lead the nation by improving the quality, security and dignity of independent work", Uber spokesman Davis White said. He pledged to "convene leaders from the Legislature, the labor movement and the business community to support innovation and a more inclusive economy".

The bill came out of a 2018 court case in the California Supreme Court, known as the Dynamex decision, which established a stricter test for determining whether a worker can be classified as a contractor. CTA tried to work with legislators to address the issue of worker misclassification while still allowing "true" independent contractors to work in the industry. It also exempts freelance journalists if they contribute 35 articles or less to a single publication within a year. But these rights are not guaranteed, as individual drivers or states will need to create a legal challenge against these independent contractors in court or enter into singular or group negotiation with their employers.

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