California Assembly Bill 5 Moves Uber and Lyft Drivers One Step Closer to Employee Status

Uber Drivers California Assembly Bill 5 - Employees or Contractors

Last week the California Assembly passed legislation that could reverberate throughout the “gig work” community should it pass the Senate and be signed by the governor. Assembly Bill 5 will change working conditions of Uber and Lyft drivers around California.

The Assembly Bill 5 is a result of California Supreme Court decision known as Dynamex. According to an article on Biz Tech, the court decision and the bill have an “ABC test” to determine if a worker is an employee or not. In order to be considered an independent contractor a worker must not be under control of the company, doing work that is central the company’s business, and must have an independent business.

Assemblywoman Lorena Gonzalez, D-San Diego, wrote the bill because companies sometimes classify workers as independent contractors to avoid laws covering minimum wage, sick leave, overtime, disability, worker’s comp and other benefits afforded to employees, adding up to 30% to a company’s labor expenses.

Steve Smith, a spokesman for the California Labor Federation, considers this a victory for California’s workers. Organized labor is behind this bill hoping that the new classifications will result in more union members.

However, many businesses believe the bill devastate their businesses, and many independent contractors fear the loss of flexibility that come with being a gig worker. Small businesses rely independent contractors because they do not have the resources to hire employees for some tasks.

Many gig workers feel the bill is nothing more than a money grab from the government and unions and prefer to keep their independent contractor status and the flexibility they desire.

Though the bill passed with a 53-11 vote, even some of its supporters feel it needs revisions before going to the Senate. One such revision would deal with exempting several professions and industries, and small businesses.

Read Our Guide: Everything You Need to Treat Your Uber Rideshare Like a Business

In its current iteration the bill exempts doctors, dentists, lawyers, architects, accountants, engineers, insurance agents, investment advisers, direct sellers, real estate agents, hairstylists who rent booths at salons, marketers and human resource professionals with advanced degrees.

Some of the other industries and professions being considered for exemption include business-to-business contracts, short-term projects and people who like to control their own schedules. Uber and Lyft drivers fall under the latter.

It will be interesting to see what version of this bill might be sent to the Senate. This is a topic all Uber and Lyft drivers no matter which state you drive in, should follow.

Your opinion matters! Please comment below: What do you think, drivers? Should Uber or Lyft drivers be considered employees or independent contractors?


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