California Senate Passes AB5 Gig-Work Bill, Granting Contractors Employee Status

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AB5 Gig Work Bill

The California State Senate has passed the AB5 gig-work bill on Tuesday, with a vote of 29-11. We have covered this development extensively over the past few months.

If you aren’t aware of the major implications it has for rideshare, you need to catch up! Check out our AB5 primer article here. 

What Is Next?

The bill will go back to the Assembly to undergo the amendment process before heading to Governor Gavin Newsom’s desk. Gavin Newsom has been vocal in support of the bill, including writing a recent op-ed for the past Labor Day.

Who Is Affected by the Passage of the Bill?

The bill will affect every gig-work company in the state. Uber and Lyft drivers; DoorDash, Uber Eats, Instacart, and Postmates couriers; Amazon Flex drivers; taxi drivers; translators; medical professionals; franchise owners, and more are one step closer to being considered employees. Rideshare drivers might be in for benefits packages and an increase in pay in California. In the long run, additional states may jump on board.

Brittany Hosea-Small | https://www.sfchronicle.com/business/article/Senate-passes-AB5-gig-work-bill-turning-14430204.php#photo-18168973

Over time, your side hustles could offer much more than just additional income for you.

What Does the Bill Mean for Drivers?

“there’s nothing innovative about underpaying someone for their labor and basing an entire business model on misclassifying workers,” Elena Durazo said.

The goal of the bill was to shift the way that rideshare companies and gig-work employers classify the people who make their business successful. Beyond the obvious benefit to rideshare drivers in California, this news has national implications.

With the upcoming election season, this bill could affect more than rideshare drivers and delivery specialists.

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The AB5 Gig-Work bill can also be viewed as California’s way of pursuing lost revenue. Many drivers and delivery specialists fall under a misclassification, resulting in California losing more than $8 billion per year.

The Fight Is Far from over for Rideshare Drivers

With the bill getting the green light from the Senate, it is on its way to the Assembly for the amendment process. At this stage, opponents of the bill will attempt to shift the language, which could change its outcome.

Uber and Lyft are both pushing hard for a ballot initiative in 2020. The measure would create a new class of workers. The major players, including Uber, Lyft, and DoorDash, have already assembled a war chest of $90 million to support the measure. They’re hoping to keep rideshare drivers from receiving employee status.

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