California Considers Law That Would Reclassify Gig Workers

The California Assembly introduced a law that would require Amazon Flex, Postmates, Uber and other similar companies to treat their gig economy contractors as employees, with the wages and benefits of that classification. The bill, which was approved 53 to 11, comes only a few weeks after Uber’s IPO was met with a brief strike by ride-hail drivers around the world protesting their low pay and contractor status. The bill now heads to the Democratic-controlled state senate where it is likely to be signed into law.

Wired reports that New York City passed a bill in 2018 legislating a mandatory minimum wage for drivers and putting a “temporary cap on ride-hail drivers.” The California law is much broader in scope, codifying a “landmark April 2018 California Supreme Court ruling, which introduced a three-part test to determine which workers businesses can reasonably classify as independent contractors and which must be treated as genuine employees.”

To classify a worker as an independent contractor, the company has to prove “that they don’t control or direct the person’s work; that the worker’s services aren’t related to the company’s main business; and that the person is engaged in an ‘independently established trade, occupation, or business of the same nature’ as the work performed.”

Under the new law, workers considered employees “are entitled to key labor protections and benefits — such as a minimum wage, overtime pay, and protections under antidiscrimination laws.” “Big businesses shouldn’t be able to pass their costs onto taxpayers, while depriving workers of the labor law protections they are rightfully entitled to,” said Assemblywoman Lorena Gonzalez.

Under the three-part test to determine status, said Data & Society technology ethnographer Alex Rosenblat, Lyft and Uber drivers will “pretty clearly fit as employees.” Also likely to be classified as employers are the “workers powering popular delivery apps like Postmates and Grubhub; child and pet care services like Care.com and Wag; and on-demand fulfillment operations like Amazon Flex.”

The bill now heads to the state senate, where Rosenblat thinks it is likely to pass, “especially given the popular backlash to large tech companies.” Regarding the California legislation, she noted, “they are setting a powerful political example for how to regulate tech and try and create better conditions under which people work in the gig economy … and that’s pretty important.”