Things were starting to get dicey in the Garden State as the legislature debated a California-like proposal that would have caused serious problems for gig economy companies and other businesses utilizing contract labor. But a measure of good news emerged last Friday as Senate leadership announced there would be changes to the draft legislation to protect a greater number of independent contractors. While we still cannot be sure about the extent of the changes and whether the resulting amendments will permit the typical gig economy company to continue business-as-usual, there is reason for optimism that the state will look to balance both the interests of workers and the needs of business when it comes to legislation in this area.
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.
As we reported just a few weeks ago, Congress has begun to gather information and consider the “future of work,” with considerable emphasis on the role of the gig economy. Although this emergency economy is growing rapidly, tension is also growing within its ranks. In particular, gig workers are attracted to earning money while maintaining all the flexibility and control they can exercise in these arrangements. But they are not entirely comfortable with the concept of being an independent contractor (IC) if that means they have no fringe benefits, are not covered by the minimum wage, and have no protection from non-discrimination laws. In this way, and in a much truer sense, ICs are “on their own.”
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?
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.
You can tell we’re well into the midst of the campaign season when presidential hopefuls reveal their plans for handling various societal concerns. We saw it as several Democratic candidates lined up to offer their plans to combat pay equity issues. Now, it’s the gig economy’s turn. A few months ago, South Bend Mayor Pete Buttigieg put forth a plan that called for greater protections for gig economy workers. Next up: Senator Bernie Sanders.
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.
“Anything you can do, I can do better.” That’s essentially the sentiment floating around Albany these days as New York lawmakers look enviously towards California and its groundbreaking new law that will soon revolutionize the way workers are characterized as contractors or employees. In the wake of California’s AB 5 – a bill that will codify the stringent ABC test into state law and make it extremely difficult for companies to classify their gig economy workers as independent contractors – New York legislative leaders are lining up to be next to reshape the state’s misclassification test, according to Newsday, “on a scale that one veteran lawmaker said would be similar to sweeping changes made during the Industrial Revolution.”
A California State Senate leader may have thrown cold water on the idea that we will see a 2019 legislative solution to the misclassification debate that would preserve the gig economy workforce model as we know it, but her office later clarified that a compromise was still possible before the close of this session. Senate President pro Tem Toni Atkins told Capital Public Radio on Wednesday that it is unlikely the legislature would be able to reach a deal that would provide protections for gig economy companies this legislative session but instead may have to wait until 2020, although her office later walked back those remarks and said that Senator Atkins is not ruling out some sort of legislative deal in 2019.