Gov. Newsom signs new contractor protection labor law

Teamsters from local unions within Joint Councils 7 and 42 took part in multiple lobbying days in Sacramento in support of AB5 meeting with legislators

California's new labor bill and its impact on the gig economy

A San Diego lawmaker's bill to limit when businesses and companies can classify employees as independent contractors was signed into law Wednesday by California Gov. Gavin Newsom.

The bill was one of the most hotly debated by the Legislature this year, legislation that began as a way to clarify state law following a 2018 ruling by the California Supreme Court that found a number of workers across the state should be considered employees of a business who are entitled to various benefits. Sharing economy basically pushes the outsourcing model to the extreme.

Supporters say they hope California's new labor law will set off a tide of similar legislation across the country and extend benefits to millions of contractors.

"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 almost a million other misclassified workers are provided the minimum wage, benefits and workplace rights of Assembly Bill 5", Gonzalez said in a statement issued last week.

If Uber, for instance, raises its fares, business volume may decline and Uber drivers' income could be negatively impacted.

"I think it's going to be very disruptive to the industry", said California Trucking Association CEO Shawn Yadon.

Newsom said in his signing statement that he wants to keep negotiating with labor and business leaders to ensure that gig workers can collectively bargain.

Drivers themselves are divided on the issue, with many lobbying in favor of the bill and others expressing concern about losing the ability to choose when they work. He said he's looking forward to the benefits and pay guarantees promised under the new law. OOIDA told its California members, "We see it as self-inflicted by motor carriers after decades of treating drivers like indentured servants, perpetuating an environment with terrible working conditions, and a failure to pay drivers anything close to a living wage".

It grants gig workers full employee rights including a minimum wage, paid sick days, workers comp and the right to a union. The federal government considers so-called gig workers to be independent contractors.

In a signing statement, Newsom called AB 5, authored by Assemblywoman Lorena Gonzalez, "landmark legislation" to combat worker misclassification.

The Lyft spokesman also alluded to exempt job titles listed on the bill which, according to the latest draft, include "licensed insurance agents, certain licensed health care professionals, registered securities broker-dealers or investment advisers, direct sales salespersons, real estate licensees, commercial fishermen, workers providing licensed barber or cosmetology services, and others performing work under a contract for professional services, with another business entity, or pursuant to a subcontract in the construction industry". It also exempts freelance journalists if they contribute 35 articles or less to a single publication within a year. Legislators gave final approval to the sweeping employment rules before adjourning for the year last week.

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