California’s AB 5 is going to be a major shake up for the gig economy.
Image: Justin Sullivan / Getty Images
By Marcus Gilmer2019-09-11 08:56:40 -0700
A California bill could be a game-changer for Uber, Lyft, and other companies in the gig economy.
The bill, AB5, was passed by California’s senate late Tuesday night. It would make gig economy companies recognize their workers as employees, as opposed to independent contractors. That would bring wage and benefits protections, like guaranteed minimum wage, health insurance, overtime pay, and the ability to unionize.
Unsurprisingly, Uber and Lyft are solidly opposed to the bill even as they switch tactics from trying to beat the bill to trying to cut a deal with drivers.
The bill will essentially put into law what the California Supreme Court decided in the spring of 2018 in the Dynamex Operations West, Inc. v. Superior Court case.
In their ruling, the court made it harder for companies to classify their workers as independent contractors. And unless workers passed the “ABC test,” already in place in Connecticut, New Jersey, and Massachusetts, they should be considered employees.
Using the ABC Test, a person is considered an employee unless the company can show they meet three factors: 1) the person is free from control and direction of their work; 2) the work falls outside the “usual course of business” for the company; and 3) the worker is engaged in an independently established business.
If you’re a driver for a ride-share company, you’re certainly performing work within the “usual course of the business,” which is why it’ll certainly sh
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