Assembly Bill 5, the gig employee bill rejected by the companies such as Uber, Lyft and DoorDash, has been approved in the California State Senate. This comes after California Governor Gavin Newsom officially put his support behind AB 5 in an op-ed.
AB5 would ensure gig economy staff are entitled to minimum wage, employees’ compensation, and other advantages.
The state Senate passed the bill in a 29 to 11 vote this evening. The state Assembly, which passes the legislation, will now vote on revisions to AB5. If the Assembly passes the legislation, which it’s anticipated to, it will go to Governor Newsom who has voiced support for the measure.
The bill, first opened in December 2018, aims to codify the ruling established in Dynamex Operations West, vs. Superior Court of Los Angeles. In that case, the court used the ABC test and determined Dynamex wrongfully categorized its workers as impartial contractors based on the presumption that “a worker who performs services for a hirer is an employee for claims for wages and benefits…”
Those who work as 1099 contractors can decide their schedules, and determine where, when, and how much they want to work. For employers, bringing on over 1000 contractors means they will avoid paying payroll taxes, overtime pay, advantages, and workers’ compensation.
Based on the ABC test, to ensure that a hiring entity to legally classify a worker as an impartial contractor, it should prove the worker is free from the management and direction of the hiring entity, performs work outside the extent of the entity’s business and is frequently engaged in an “independently developed trade, occupation, or business of the same nature as the work carried out.”
Uber and Lyft, two of the central targets of this legislation, are adamantly opposing it. In August, Uber, Lyft, and DoorDash ramped up their efforts to do whatever they can to stop it from happening. That’s partly because of the truth that the companies value of operating would increase.