California's Assembly Bill 5 reclassifies gig workers as employees

Signal of change / California's Assembly Bill 5 reclassifies gig workers as employees

By Anna Simpson / 19 Sep 2019

A landmark bill has been passed in California that entitles gig workers to protections usually reserved for employees, such as the minimum wage, health insurance and unemployment benefits. Californians supported the bill, Assembly Bill 5 (AB5), by almost two-to-one, according to a poll.


It will be applicable in cases where workers perform a central function of the company's core business. The bill means employers would now be required take a test, 'the ABC test', to prove if their workers are actually independent contractors rather than employees. 

 

Uber, Lyft, and DoorDash - companies that depend on the gig economy - have already committed a total of $90 million to oppose the bill's implementation.

 

 

 

 

 

 

 

So what?

Upon signing the bill, the Office of the Governor of California said:    "The need to create lasting economic security for our workforce demands action. Assembly Bill 5 is an important step. A next step is creating pathways for more workers to form a union, collectively bargain to earn more, and have a stronger voice at work - all while preserving flexibility and innovation."   The Governor stated his intention to convene leaders from the business community, the legal system and the workers' movement in support of this.     Uber has 3.9 million drivers worldwide. The company's commitment to thwarting the Bill's passage is testimony to its dependence on low levels of commitment to its workforce, avoiding any benefits.    If the bill is successful, could we see the emergence of a new relationship between workers and companies, combining flexibility with social protection? Will forwards-looking and well-meaning companies find ways to embrace such a model, and pay for it? Already, companies and countries face a crisis in paying for pensions. Will new structures be required to cover the costs of keeping gig workers healthy and secure?   Finally, if AB5 is succesful, which countries and states will be first to follow suit?     

Sources

https://gizmodo.com/ab5-landmark-bill-protecting-gig-workers-in-california-1838222549   https://www.nytimes.com/2019/09/09/business/economy/uber-lyft-california.html?action=click 

What might the implications of this be? What related signals of change have you seen?

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