California has just disrupted the concert economy.
Governor Gavin Newsom signed a controversial bill on Wednesday, known as AB 5, after months of commotion by companies and companies such as Uber and Lyft. The bill would require companies to hire workers as employees, not independent contractors, with some exceptions. This would give hundreds of thousands of California workers basic labor rights for the first time.
Despite the aggressive lobby campaign, Uber and Lift were not excluded.
Senators voted 29 to 11 against AB 5 last week, and the state assembly approved its amendments to the bill.
“I am now in a position to earn a living,” driver Annette Rivero, a member of Rideshare Drivers United, told Fox on Wednesday.
The new law will take strong action against a business model advocated and valued by Silicon Valley, a sudden turnaround for events in the famous technology industry. Uber, Lyft and other app-based party companies rely on hundreds of thousands of independent contractors to take them, serve food and complete other tasks.
Reclassifying them as employees will change everything.
Gig employees will get job protection and benefits that all employees receive, such as unemployment insurance, health care benefits, parental leave with pay, overtime, workers compensation, paid leave, and a guaranteed minimum wage of $ 12 an hour. And perhaps most importantly, it can unions.
The additional cost of these benefits is the reason why concert companies are so desperate to commit. They did not get one. But this does not mean that they will not continue to try.
It passed after the Senate vote. We are fully prepared to present this issue to California voters to maintain freedom and access to the drivers and passengers they want and need.”
Lyft, Uber, and DoorDash have warned of their willingness to spend $ 30 million on an electoral initiative to abolish AB 5. The California federations, which support AB 5, have promised to defend themselves.
The dispute between the unions and Uber, one of the most popular investments in Silicon Valley, is perhaps the most important legislative battle in the country. Newsom support for AB 5 was an amazing loss for the technology industry and a notable victory for unions. Approval of the bill could open the door to other democratically-controlled countries to do the same.
California AB 5 Bell explained
The California bill, known as AB 5, extends to a revolutionary decision by the California Supreme Court last year known as Dynamex. The ruling and the bill require companies to use what is called an ABC test to determine whether or not an employee is an employee. To hire an independent contractor, companies must demonstrate that worker a) is free of company control, b) perform a decentralized job in the company’s business, and has an independent company in that industry. If they do not meet these three conditions, they must be classified as employees.
This is a more straightforward test standard than vague guidelines for federal law. It is one of the biggest challenges facing the profit model of Uber, Instacart, Postmates and other technology companies that rely on a small army of independent contractors. Uber would likely have to reclassify tens of thousands of drivers in California as employees, something Uber drivers have been fighting for in court, to no avail, for years.
Since the bill was passed in the State Council in May, California companies have been in panic over the possibility of passing it. The government Chamber of Commerce and dozens of industry groups pressed for exemptions, and a long list of occupations was excluded from the bill: doctors, dentists, lawyers, architects, insurance Who rent cabin in salons.
Transport apps have done everything possible to keep drivers and contractors
When Uber drivers’ strikes began around the world in May, much of their frustration was related to their lack of strength as independent contractors.
Uber’s profit model, like other companies in the party economy, depends on all the money saved by circumventing US labor laws.
By categorizing drivers as freelance contractors instead of employees, Uber didn’t have to pay some taxes, benefits, overtime, or minimum wages for tens of thousands of drivers. As independent contractors, drivers had no legal right to form trade unions or negotiate contracts.
Uber drivers spent more than six years fighting the company in court, saying they were wrongly classified. They said drivers should be considered employees because the company has a lot of control over their working day, including strict rules regarding the conditions of their cars, the trips they can take and the routes used.
Over the years, Uber has refused to reclassify drivers, asserting that drivers are not employees because they set their own schedules and offer their own cars.