Seattle just joined New York City as one of the few locations in the country to pass minimum wage legislation for ride-share drivers, the city’s latest attempt to regulate the gig economy. Under the “Fair Share” program pushed by Mayor Jenny Durkan and unanimously approved by the City Council on November 25, a new tax of 51 cents per ride will be levied to fund affordable housing programs and other civic projects, as well as help pay for the $16 per hour minimum wage and various other workplace protections. The plan will only impact those ride-share drivers working for companies that handle 1 million rides per quarter in Seattle (which as of now would only impact Uber and Lyft drivers).
We’ve written about the “Future of Work” efforts recently undertaken by Congress – a series of hearings aimed at discussing various issues that we can expect to impact workplaces in the near future. And according to a recent report by Bloomberg Law’s Jacyln Diaz, it appears that both political parties could be aiming to bridge their philosophical differences to find common ground when it comes to issues impacting the gig economy.
We’re now just a few weeks away from the nation’s most stringent independent contractor misclassification law taking effect in California. But if a group of truck drivers have their way, the law will stall out before it ever gets on the road. The California Trucking Association filed an amended lawsuit in federal court on November 12 asking the court to block the new statute from taking effect, claiming that it violates federal law and would harm over 70,000 independent truckers who have chosen to be independent workers. It appears to be the first legal challenge to California’s AB 5, and all eyes will be on this litigation over the next month.
When California’s AB 5 was signed into law last month, a chorus of voices decried the fact that it could radically change the gig economy as we know it. Many contended that the average app-based driver enjoyed being an independent contractor and didn’t want to see changes to the law that would make it harder for them to be classified as such. This time next year, California voters may have a chance to give voice to those critics and scrap the ABC test when it comes to gig economy drivers.
Lawmakers have begun to hold a series of hearings to discuss the “future of work,” and it may be no surprise that the two political parties have differing ideas about how that should impact the gig economy. The House Education and Labor Committee held the first of three such meetings on October 23, aiming to ensure that the law keeps up with modern developments such as automation, artificial intelligence, and the gig economy. While Democratic lawmakers seem to want to increase restrictions on the industry, their Republican counterparts are looking toward more flexible options. According to an article by Jaclyn Diaz of Bloomberg Law, the working subcommittees will recommend specific legislation early next year. What might such legislation look like, and what chances of success might it have?
Gig economy businesses across the country looked to what happened in California this year and cringed. Other states looked there and were intrigued. After California passed the most aggressive independent contract statute in the nation in 2019 and made it extremely difficult for gig economy businesses to classify their workers as independent contractors, a string of states are considering their own equivalent statutes. 2020 could be the year that the ABC test spreads far and wide across the country.
A Massachusetts federal court just ruled that gig workers cannot escape arbitration provisions by claiming they are exempt transportation workers. The September 30 decision in Austin v. DoorDash marks the second win for gig businesses following a troubling Supreme Court ruling in January 2019 that opened the door to a possible arbitration exemption. However, there remain other federal courts that have ruled for workers on this issue, and the Massachusetts court even indicated there could have been worker victory had the fact pattern been slightly different, so companies are not out of the woods on this issue by a long shot.
You’ve been waiting quite a long time for a critical ruling from the 9th Circuit Court of Appeals on the very fabric of the gig economy model – and you’re going to have wait even longer. The appeals court just announced late last week that the Lawson v. Grubhub case has been put on hold while it waits to hear from the California Supreme Court on whether the new ABC test should be applied retroactively to the case, or whether the appeal would apply the older flexible misclassification test that had been in place at the time the trial took place.
California Governor Gavin Newsom wasted little time by signing AB 5 into law earlier today, and his signing statement should cause quite a few eyebrows to be raised. It was no surprise that he signed the bill into effect; he said he would do as much in an op-ed posted several weeks ago in the Sacramento Bee. For those unaware, the new law will dramatically raise the bar for classifying a worker as an independent contractor in California by adopting the ABC test to just about all business arrangements (read our full summary here). But what was surprising was the contemporaneous statement he made while signing the bill into effect, signaling that the unionization of the gig workforce was the next step he’d like the state to pursue.
Negotiations continued right up until the end, but when the dust settled on California’s newest employment law, gig economy companies were not spared from the worst. Yesterday, state lawmakers passed AB 5, the state law that will not only codify the same ABC test introduced to the state in last year’s Dynamex decision but will take it a few steps further.