A bill that could upend the gig economy in California took a major step forward Tuesday.
Late into the evening, the state Senate approved Assembly Bill 5, which would limit who could be classified a contractor and give new wage and benefit protections to scores of workers at so-called gig economy companies like Uber and Lyft, in addition those working in a host of other industries.
The 29-11 vote, largely along party lines, sends the bill back to the state Assembly for final approval over strident Republican opposition. Democratic Gov. Gavin Newsom has said he supports it.
Under a 2018 state Supreme Court decision, workers who perform core functions of a business must be classified as employees and not contractors. AB 5 would codify that decision.
State Sen. MarÃa Elena Durazo, D-Los Angeles, said for too long, companies like Uber and Lyft have skirted labor laws and taken advantage of workers.
âThese so-called gig companies present themselves as the innovative future of tomorrow,” she said. “A future where companies donât pay Social Security or Medicare, workers compensation or unemployment insurance.â
Opponents of the measure say it allows exemptions for certain professions â like doctors and hairdressers â while ignoring others. State Sen. Shannon Grove, R-Bakersfield, said many people prefer the freedom contract work gives them.
“This Legislature should not be in the business of picking favorites, which is exactly what this legislation does,” Grove said.
Tech companies, in particular, have been left out of the exemptions. Efforts late in the session to gain a carve out either in AB 5 or through separate legislation were unsuccessful. Uber, Lyft and DoorDash have begun funding a potential initiative for the 2020 ballot that would create a third classification for their workers.
The bill now goes to the Assembly for a final vote.
Copyright 2019 KQED