California has proposed gig economy legislation that could potentially change workers’ classifications from independent contractors to actual employees, which would make them eligible for the benefits pertaining to that status, according to a report by CNBC.
The bill, called Assembly Bill 5, could have implications in other states dealing with the same issue. Oregon and Washington also have pending bills on the issue.
The bill, if passed, would not only impact ride-hailing firms, but freight trucking companies as well. The bill recently passed the California Assembly and is currently under consideration in the state Senate. The California Governor Gavin Newsom has not said whether he supports the bill.
“A lot of workers in California and throughout the nation have been misclassified for years,” said Assemblywoman Lorena Gonzalez. “There’s a whole list of things people are entitled to as employees that they don’t get as independent contractors – minimum wage, overtime, wage and hour rules, sick leave, paid family leave, unemployment insurance, workers’ compensation and, in some instances, healthcare.”
She also said that categorizing workers as independent affects their ability to organize. Many Uber and Lyft drivers in several major cities have organized strikes to spotlight low wages and other problems. Lyft has about one million drivers around the world, and Uber has about three million.
Said Nicole Moore of Rideshare Drivers United in Los Angeles: “Our No. 1 issue is fair wages, (because) most of us make less than minimum wage after expenses.”
Uber and Lyft do not support the legislation.
“We support efforts to modernize labor laws in ways that preserve the flexibility drivers tell us they value while improving the quality and security of independent work,” an Uber spokesperson said.
Gonzalez hopes the legislation will spur other states into action. “We see movements on the gig economy in New York and Washington,” she said. “We know there’s concern out there. Might we provide a level of certainty that other states want to follow? I would hope so.”