AB5 Is Now The Law Of The Gig Land In California

In a decision that is reportedly not likely to calm an increasing debate when it comes to the nature of work or rules in the gig economy of the 21st century, Gov. Gavin Newsom signed into law a proposal that would have California companies limited with respect to their use of independent contractors.

The governor signed Assembly Bill 5 (AB5) in his state Capitol office through a ceremony that was private, the Los Angeles Times reported.

“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, author of AB5, in a written statement.

However, many powerful business interests looked for specific exclusions from the legislation. The app-based tech industry of the state was “left out of the final changes to the bill,” the Times noted. The sector reportedly maintained that it would still look for exemptions for any new mandate that would have workers classified as employees.

It was also noted that last month, Uber, DoorDash and Lyft opened a campaign committee for taking the issue to voters in the state with a ballot measure in 2020. However, Newsom reportedly pledged to keep the discussion going with business groups that are concerned when it comes to the new legislation (that reportedly goes into effect in 2020.)

The landmark legislation AB5 passed the Senate last week on Wednesday (Sept. 11). At the time, it was reported that the bill was expected to be supported by the Assembly and signed into law by Newsom.

The bill challenges the definition of contractors in the gig economy and could lead to some workers being reclassified as employees per previous reports. The bill reportedly puts the burden of proof on the employer and requires that firms classifying workers as contractors prove it based on new criteria.