Bill to clas­sify Uber, Lyft driv­ers as em­ploy­ees awaits New­som’s de­ci­sion

The Sacramento Bee - - Front Page - BY SOPHIA BOLLAG sbol­[email protected]

Cal­i­for­nia is poised to en­act a pro­posed law to ex­pand which work­ers are en­ti­tled to em­ployee benefits af­ter the state As­sem­bly voted Wed­nes­day to send the bill to Gov. Gavin New­som, who says he sup­ports it.

Sup­port­ers ar­gue the bill will end ram­pant mis­clas­si­fi­ca­tion of work­ers as independen­t con­trac­tors, who aren’t guar­an­teed em­ployee rights like min­i­mum pay and com­pen­sa­tion for in­juries sus­tained on the job.

“It makes sure that the 1 mil­lion independen­t con­trac­tors in Cal­i­for­nia get the wages and benefits they de­serve,” said Assem­bly­woman Lorena Gon­za­lez, the San Diego Demo­crat who au­thored the bill.

The new rules will af­fect a wide range of pro­fes­sions and trades that are still push­ing for ex­emp­tions, from truck­ers to health care work­ers.

But the loud­est voices rais­ing con­cerns about the bill have been gig econ­omy com­pa­nies. Ride-share com­pa­nies Uber and Lyft and de­liv­ery ser­vice DoorDash have pledged to spend a com­bined $90 mil­lion to take the is­sue to vot­ers in 2020 if they don’t se­cure some relief from the new em­ployee clas­si­fi­ca­tion test.

Im­me­di­ately af­ter the bill’s pas­sage, how­ever, Uber said the com­pany doesn’t agree that driv­ers must now be­come em­ploy­ees.

De­spite the con­cerns ride

share com­pa­nies have voiced about the new rules and the mil­lions of dol­lars they’re committing to the bal­lot mea­sure, Uber’s chief le­gal officer Tony West said the com­pany will con­tinue treat­ing driv­ers as independen­t con­trac­tors.

He said the com­pany is pre­pared to de­fend its po­si­tion in court to avoid dam­age to its busi­ness model.

“Just be­cause the test is hard doesn’t mean that we won’t be able to pass it,” he told re­porters on a call Wed­nes­day af­ter­noon, but added that the out­come isn’t guar­an­teed. “If we go through a process where these cases are lit­i­gated… and we lost and driv­ers then be­come em­ploy­ees, then there would be costs that go along with that.”

The As­sem­bly passed the bill 56 to 15, send­ing it to New­som’s desk.

The leg­is­la­tion cod­i­fies a 2018 Cal­i­for­nia Supreme Court de­ci­sion known as “Dy­namex” that in­sti­tutes a new test for who is clas­si­fied as an em­ployee. The bill carves out ex­emp­tions from the new rules for dozens of pro­fes­sions, in­clud­ing lawyers, real es­tate agents and den­tists. News­pa­pers also se­cured an eleventh-hour ex­emp­tion for their de­liv­ery work­ers through a sep­a­rate bill, which will give them a one-year break from the rules.

Law­mak­ers ac­knowl­edged many more in­dus­tries and worker groups are still seeking ex­emp­tions and said they will likely con­tinue ne­go­ti­at­ing into next year. But in the mean­time, Democratic law­mak­ers ar­gued the bill will help work­ers and give im­por­tant clar­ity to the in­dus­tries who did se­cure an ex­emp­tion.

“If we don’t pass this bill, there are no ex­emp­tions,” said Assem­bly­man Ian Calderon, D-Whit­tier, be­cause Dy­namex is “al­ready the law of the land.”

News­pa­pers could get a one-year re­prieve from the new la­bor rules that would have forced com­pa­nies to treat news­pa­per car­ri­ers as em­ploy­ees un­der a bill amended Tues­day evening.

Gon­za­lez an­nounced the last-minute changes just be­fore the dead­line to amend bills be­fore law­mak­ers break for their year-end re­cess Friday.

“Due to de­mands made in the Se­nate re­gard­ing the Dy­namex de­ci­sion’s im­pli­ca­tions for the news­pa­per in­dus­try, our of­fice has amended As­sem­bly Bill 170 to al­low for a one-year de­lay in im­ple­men­ta­tion for news­pa­pers de­liv­ery ser­vices,” the San Diego Demo­crat said in a state­ment. “While I per­son­ally dis­agree with this de­lay, I’m will­ing to al­low the news­pa­per in­dus­try the ad­di­tional year to com­ply if it means those de­liv­ery driv­ers and nearly a mil­lion other mis­clas­si­fied work­ers are pro­vided the min­i­mum wage, benefits and work­place rights of As­sem­bly Bill 5.”

News­pa­per com­pa­nies said clas­si­fy­ing car­ri­ers as em­ploy­ees will threaten their busi­ness model and im­peril pa­pers al­ready un­der fi­nan­cial stress.

Many of the in­dus­tries that se­cured ex­emp­tions lob­bied hard on the mea­sure, spend­ing mil­lions of dol­lars to shape AB 5 and other mea­sures in the first half of the year.

As­sem­bly Repub­li­can Leader Marie Wal­dron of Es­con­dido crit­i­cized the bill’s “carve-outs for the trade groups with the best lob­by­ists,” ar­gu­ing many oth­ers have been left be­hind.

Assem­bly­man Jay Ober­nolte, R-Big Bear, said he wouldn’t have been able to start his own busi­ness as a col­lege stu­dent un­der the bill.

“It sti­fles in­no­va­tion and en­trepreneur­ism here in Cal­i­for­nia,” Ober­nolte said. “I’m tired of hear­ing peo­ple say that this bill em­pow­ers work­ers. This bill dis­en­fran­chises work­ers.”

Gon­za­lez said the bill will help even the play­ing field for busi­nesses that are treat­ing their work­ers prop­erly

“We wanted to strike a bal­ance, a bal­ance that pro­tects work­ers and pro­tects small busi­nesses,” Gon­za­lez said. “This isn’t per­fect, but this bill goes a long way to­ward protecting work­ers.”


Assem­bly­woman Lorena Gon­za­lez, D-San Diego, urged law­mak­ers to ap­prove AB 5 dur­ing the As­sem­bly ses­sion in Sacra­mento on Wed­nes­day. “It makes sure that the 1 mil­lion independen­t con­trac­tors in Cal­i­for­nia get the wages and benefits they de­serve,” said Gon­za­lez, who au­thored the bill. The As­sem­bly passed the bill 56 to 15, send­ing it to Gov. Gavin New­som, who says he sup­ports it.

JA­SON PIERCE [email protected]

A pro­tester joins Uber and Lyft driv­ers at the Cal­i­for­nia state Capi­tol on Aug. 28 to sup­port AB 5. The new rules would af­fect pro­fes­sions and trades that are still push­ing for ex­emp­tions, from truck­ers to health care work­ers.

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