Assembly Passes Landmark Gig Economy Bill; Awaits Newsom Signature
SACRAMENTO (CBS SF/AP) — A bill that would provide new wage and benefit protections to workers at so-called gig economy companies such as Uber and Lyft was approved the state Assembly Wednesday and now just needs Gov. Gavin Newsom's signature to become law.
The state Assembly passes the measure by a 56-15 margin. The Senate passed the measure with a 29-11 vote late Tuesday over strident Republican opposition.
If signed, the proposal could have national implications as politicians and businesses confront the changing nature of work in the so-called gig economy.
In a rare injection of presidential politics into a state issue, most of the major Democratic presidential contenders urged California lawmakers to pass the bill and have championed similar proposals in their campaigns.
The bill by Democratic Assemblywoman Lorena Gonzalez has drawn staunch opposition from on-demand delivery and ridesharing companies that say it will effectively kill their business model.
Meanwhile, the drivers were divided on the issue.
The bill would put into law a California Supreme Court decision making it harder for companies to classify workers as independent contractors and instead would make them classify the workers as employees.
While its impact on gig economy companies has drawn most of the attention, it would affect a wide array of industries.
"Today these so-called gig companies present themselves as the so-called innovative future of tomorrow," Democratic Sen. Marie Elena Durazo of Los Angeles. "Let's be clear. There is nothing innovative about underpaying someone for their labor."
The law lays out a test to decide if workers can be labeled as contractors. They worker must be free from control of the company, perform work "outside the usual course of the hiring entity's business," and be engaged in an independently established trade, occupation or business of the same nature of the work they are performing.
Uber, Lyft and meal delivery companies such as Doordash and Postmates still hope Newsom can negotiate a new proposal with unions that would create a separate set of rules for gig workers.
They have proposed a base hourly for workers, paying into a fund for benefits including accident coverage and allow for "sectoral bargaining," where workers across the industry could organize. Several of the companies have threatened to spend $90 million on a ballot measure next year if they do not get their way.
They've argued that making their workers employees would limit workers' abilities to work flexible hours of their choosing.
Gonzalez says nothing in the law forces the companies to eliminate worker flexibility. As employees, the workers would be entitled to minimum wage and benefits such as workers compensation, unemployment insurance and paid leave.
Federal law still considers gig workers independent contractors, so it's unclear if a state law making them employees would allow workers to unionize.
