Left Menu
Development News Edition

UPDATE 3-California Senate passes bill to tighten 'gig' worker rule

Reuters | California | Updated: 12-09-2019 01:24 IST | Created: 12-09-2019 01:23 IST
UPDATE 3-California Senate passes bill to tighten 'gig' worker rule
Representative image Image Credit: ANI

The California State Senate voted on Tuesday to pass a bill that would make it much more difficult for gig economy companies like Uber Technologies Inc and Lyft Inc to classify workers as independent contractors rather than employees. The bill, which was sponsored by California Assemblywoman Lorena Gonzalez and is backed by Governor Gavin Newsom, passed the chamber with 29 votes in favor and 11 votes against it.

Called AB5, the law has garnered national attention, largely owing to the size of California's workforce. Several Democratic presidential candidates have supported the measure, including U.S. senators Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont and Kamala Harris of California. "By approving AB5, the California legislature solidified our state's position as the national leader on workplace rights," the California Labor Federation said in a statement. The bill has come under sharp criticism by trade groups and so-called "gig economy" technology firms that rely heavily on the state's 450,000 contract workers.

"We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need," Lyft said in a statement. The bill strikes at the heart of the "gig economy" business model of technology platforms like Uber, Lyft, DoorDash, PostMates and others who rely on hundreds of thousands of independent workers, not full-time employees, to drive passengers or deliver food via app-based services.

Backers of the bill, including labor groups, have argued that classifying these California workers as employees would be the fix to longstanding driver complaints about low pay and the lack of medical insurance and other benefits. The consequences of the bill remain unclear in the short-term for both Uber and Lyft, who have argued that the legislation compromises the flexibility prized by their workforce, and that fewer workers would be hired were they considered employees.

Both companies are unprofitable and have historically relied on subsidization to attract riders. In recent weeks, Uber, Lyft and DoorDash have pushed for separate legislation that would increase pay and benefits for drivers yet maintain their status as independent contractors. Company officials have said a compromise deal is still possible, even after the passage of AB5.

Uber and Lyft have both said they would support a minimum wage, while driving on a trip, of $21 per hour. The two ride-hailing companies and DoorDash earmarked $90 million for a planned November 2020 ballot initiative that would exempt them from the law.

The bill next goes back to the Assembly for a final vote and then moves on to Governor Newsom for signature. California is the nation's most populous state and a leader in establishing policies that are adopted by other states.


The bill codifies a 2018 California Supreme Court decision, Dynamex Operations West Inc v. Superior Court, that set out a more stringent three-point test for determining whether workers are properly classified as independent contractors.

The court said workers are a company's employees under state wage laws when the company exercises control over their work or they are integral to its business. Uber Chief Legal Officer Tony West said little would change in the immediate aftermath of the law because the passage of the bill does not automatically reclassify drivers.

Uber could "meet the harder test to the satisfaction of arbitration and courts" if needed, West said. Last week, the bill was amended to allow city attorneys to sue for injunctive relief if companies do not abide by AB5.

Also Read: Rideshare, delivery apps pledge $90M California ballot fight



Post-COVID-19 Nigeria needs a robust Health Management Information System to handle high disease burden

Nigeria is among a few countries that conceptualised a health management information system HMIS in the early 90s but implementation has been a challenge till date. Besides COVID-19, the country has a huge burden of communicable and non-com...

Morocco COVID-19 response: A fragile health system and the deteriorating situation

Learning from its European neighbors, Morocco imposed drastic measures from the initial stages of the COVID-19 outbreak to try to contain its spread. The strategy worked for a few months but the cases have surged after mid-June. In this sit...

COVID-19: Argentina’s health system inefficiencies exaggerate flaws of health information system

You can recover from a drop in the GDP, but you cant recover from death, was the straightforward mindset of Argentinas President Alberto Fernndez and defined the countrys response to COVID-19. The South American nation imposed a strict...

Rwanda’s COVID-19 response commendable but health information system needs improvement

Rwanda is consistently working to improve its health information system from many years. However, it is primarily dependent on the collection and reporting of health data on a monthly basis. Besides, evaluation studies on Rwandas HIS publis...


Latest News

Reuters Sports News Summary

Following is a summary of current sports news briefs. Halep sees off Muguruza to reach Italian Open finalTop seed Simona Halep overcame Spaniard Garbine Muguruza 6-3 4-6 6-4 on Sunday to reach the Italian Open final and stay on course for h...

Reuters World News Summary

Following is a summary of current world news briefs. UK at critical point in COVID pandemic, top medical adviser saysBritain is at a critical point in the COVID-19 pandemic and faces a very challenging winter, one of the governments top med...

Giants break out in a big way, finally, against A's

Left-hander Tyler Anderson rebounded from an early ejection in his last start to pitch into the sixth inning and the visiting San Francisco Giants vented five games worth of frustration on the Oakland Athletics on Sunday afternoon, whipping...

Reuters US Domestic News Summary

Following is a summary of current US domestic news briefs. Supreme Court fight after Ginsburgs death energizes women voters on both sidesWaiting for President Donald Trump to speak at a campaign rally in North Carolina on Saturday, Paulette...

Give Feedback