California has now passed a landmark bill requiring contract workers to be identified as employees which greatly impacts a ride sharing company like Uber. Deirdre Bosa reports from San Francisco.
California lawmakers have passed the landmark bill on Wednesday that is going to threatens how companies like Uber and Lyft are going to do the business.
More Detail About Uber lawmakers Bill
The legislation is called as Assembly Bill 5 (AB5), was passed in the state Assembly and now it is heading toward the Democratic California Gov. Gavin Newsom’s desk. According to AB5, it will require gig economy workers to be reclassified as employees instead of the contractors. The bill was passed in the state Assembly in a 61-16 vote, Assemblywoman Lorena Gonzalez (D-San Diego), who was the bill’s author gave a statement that states that the bill will be passed in the state Senate on Tuesday.
Uber and Lyft said that the AB5 will not immediately change the independent contractors into the employees. According to the Uber’s chief legal officer, Tony West, the bill will build on legal tests that are already established in California around how the drivers should be classified. Furthermore, he added that West said drivers will not necessarily fall under the new rules stated in the AB5. The other part of the statement includes:
According to West, “Under the three-part test, a company will prove that contractors are doing work outside the usual course of their business,” Several previous rulings have pointed that drivers’ work is outside the course of Uber’s business that is serving as a technology platform for different types of digital marketplaces.”
In addition to this, West also said that Uber intends to follow AB5 should it be law next year, but it will continue to try to prove that it does not fall under its legal framework. “We are operating in a regulated environment and we will recognize that there will be some legal challenges in the future”
He further stated that he was encouraged by Government Newsom’s efforts regarding negotiating a solution on the bill. Newsom said in an interview to The Wall Street Journal on Wednesday that he will still be engaged in talks with Uber, Lyft and other economy companies about the possible negotiations on the bill. Newsom is more expected to sign the bill, after voicing support related to it earlier this month.
It is important to note that the bill has received broad support from Democratic presidential candidates including Sens. Elizabeth Warren, D-Mass., Bernie Sanders, I-Vt. Kamala Harris, D-Calif., as well as South Bend, Indiana, Mayor Pete Buttigieg.
The bill is having the potential to change the employment status of more than 1 million low-wage workers in California. This bill is not focusing only on the gig workers at companies like Uber, Lyft, DoorDash, Postmates, and Instacart. This bill will make it harder for gig economy companies to prove that their workers are not a staff while ensuring key benefits and protections, related to minimum wage, insurance, and sick days.