California Senate Approves Gig Worker Regulation
The bill would make it harder for companies like Uber to classify its workforce as independent contractors.
Sep 13, 2019
SACRAMENTO—This week, the California Senate passed a bill that would make it harder for gig economy companies to refer to workers as independent contracts instead of employees, Reuters reports. Assemblywoman Lorena Gonzalez sponsored AB5, and Gov. Gavin Newsom supports its passage. “By approving AB5, the California legislature solidified our state’s position as the national leader on workplace rights,” said the California Labor Federation.
However, targeted companies, such as Lyft, DoorDash, PostMates and Uber, took issue with the measure. “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,” said Lyft.
The gig economy business model relies on thousands of independent, part-time people to deliver goods or passengers. It is a growing set of industries, with Online Food Delivery for example expected to be a $200 billion business by 2025 worldwide. Labor groups are backing the bill, which they see as addressing long-term problems of low pay and lack of benefits, including health insurance.
Both Lyft and Uber say the proposal would hurt the flexibility their workforce enjoys, as well as thin the ranks of those employed by the companies. The ride-hailing companies, along with DoorDash, have suggested different legislation that would raise pay and benefits for drivers, while keeping their independent contractor status.
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