California bill on gig economy hailed as victory for workers

Local advocates say changes could have far-reaching effects in precarious labour market

For those wondering why it’s so hard to find a middle-class job or agonizing over rising income inequality, pay attention to a new California bill that tackles those issues — by taking aim at the gig economy in a way that could drastically change the face of precarious work.

The legislation means companies like Uber will no longer be able to exclude workers in California from basic rights like minimum wage by calling them independent contractors, a category that has no protection under workplace laws. And in Ontario and beyond, labour advocates are watching closely.

“In terms of the changing labour market and workplace today this is probably the biggest issue for precarious, non-standard workers,” said Mary Gellatly of the Toronto-based Parkdale Community Legal Clinic, “because employers are increasingly looking at how to shift their liability or responsibilities for work being done.”

California’s Assembly Bill 5, approved Tuesday, is the most significant blow yet to employee misclassification, which worker advocates have long described as the bedrock of the gig economy. The practice sees companies categorizing workers as self-employed to evade workplace protection obligations, workers’ compensation premiums and payroll taxes. While it’s popularly associated with businesses like Uber, which steadfastly maintains its drivers are not employees, the practice is also common in sectors like cleaning, construction, nail salons and courier services.