CA State Legislature passes bill, redefines employee criteria

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After facing a wave of backlash, the California State Legislature passed AB 5, which seeks to redefine what it means to be an employee in California and increase worker protections.

The bill — intended to extend a California Supreme Court ruling from 2018 — would consider independent contractors to be employees. It also plans to increase the number of workers eligible for benefits and boost the funds deposited into the unemployment fund, according to the bill.

“We cannot sit by while companies pass off their own costs of doing business onto California’s taxpayers and responsible businesses, while depriving millions of workers of the labor law protections that they are rightfully entitled to,” said California Assemblymember Lorena Gonzalez, D-San Diego, in a press release.

California Gov. Gavin Newsom has already expressed an intent to sign the bill — which would go into effect in January 2020.

Although the bill aims to increase the number of individuals classified as employees, there are a series of exemptions to it. According to the bill, such exemptions include when “the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation or business.”

According to the press release, hundreds of supporters have made a presence in Sacramento — but they were not the only ones voicing their opinions on the bill.

Terry Regan, president of Berkeley Northside Travel, said about 150 workers in the travel industry lobbied for independent contractors in their industry to be exempted — a move he said was critical for the survival of travel agencies.

Independent contractors working for travel agencies have since been exempted, Regan added. 

“I gather we were very successful,” Regan said. “If they didn’t exempt (some travel agencies), they would have gone out of business.”

According to a statement released by Tony West, Uber’s chief legal officer, AB 5 would not reclassify ride-sharing drivers as employees, provide benefits or give drivers a right to organize.

According to West, currently the company’s 200,000 California drivers have the ability to make their own decisions regarding “when, where and how they work.”

He added in the statement that 92 percent of Uber drivers work less than 40 hours per week, of which 45 percent drive less than 10 hours. Passage of AB 5 would change that, West said, adding that the company will “continue to defend that kind of choice, flexibility, and independence.”

“We will continue advocating for a compromise agreement, and we were encouraged by Governor Newsom’s comments,” West said in the statement. “But we are also pursuing several legal and political options, including working with Lyft and other Internet platform companies to lay the groundwork for a statewide ballot initiative in 2020.”

Meanwhile, the UC System has yet to take a stance on the bill as they are still reviewing the effects it could have on UC workers, according to UC Office of the President spokesperson Andrew Gordon.

Mallika Seshadri is an assistant news editor. Contact her at [email protected] and follow her on Twitter at @SeshadriMallika.