Calif. Governor Signs Bill on Independent Contractors
The new law will reclassify many people as employees, rather than freelance workers.
Sep 20, 2019
SACRAMENTO—This week, California Gov. Gavin Newsom signed a bill, approved by the California State Senate last week, that would make it harder for companies like Uber to classify its workforce as independent contractors, the Los Angeles Times reports.
The new law, which goes into effect Jan. 1, “will help reduce worker misclassification—workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” Newsom said.
Under AB 5, Californians will be classified as employees unless the business can prove the work performed meets criteria put in place by the California Supreme Court. Those specifics would mean someone is an employee if the job is part of the business’s core tasks, if supervisors directly oversee how the work is accomplished, or if the person doesn’t have an independent business or trade already established.
“As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow,” said Assemblywoman Lorena Gonzalez, who authored the bill.
The legislation has a host of exemptions, including doctors, real estate agents, travel agents, accountants, architects, investment advisors and graphic designers. Other professions are exempt under certain conditions, such as salespeople whose pay is based on actual sales, and personal care businesses, like hair dressers, if they set their own rates, schedule appointments directly with the client and clients pay them directly.
Lyft, Uber and other delivery and ride-hailing services expressed mixed feelings about the new law. “If necessary we are prepared to take this issue to the voters to preserve the freedom and access drivers and passengers want,” said Adrian Durbin, a Lyft spokesman.
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