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.”
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.
Chalk up in the win column for businesses. Yesterday the National Labor Relations Board ruled that companies found to have misclassified workers as contractors will not automatically face liability for an unfair labor practice.
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.
The Gig Economy has caught the attention of at least one presidential candidate who has unveiled a plan called “A New Rising Tide” which, among other things, calls for greater protections for gig economy workers.
With just a one-page, single-paragraph Order, the 9th Circuit Court of Appeals yesterday provided the faintest glimmer of hope for gig economy businesses everywhere – but especially for those in California. The federal appeals court withdrew its May 2 decision that had extended the Dynamex decision on a retroactive basis, meaning that the ABC test might not necessarily be as broadly applied as we recently thought. Instead, the 9th Circuit decided to send the issue to the California Supreme Court, asking the state’s high court to conclude once and for all whether the ABC test should be applied to alleged misclassification controversies that arose before the Dynamex decision was ever issued. (For a quick primer on the Dynamex case and the ABC test, read here.)
New York lawmakers just introduced the “Dependent Worker Act” into the Assembly and Senate this past week, which proposes to provide workers in the gig economy with certain rights that previously were only available to “employees.” However, just as quickly as the bill was introduced, the bill’s sponsor delayed consideration of the bill until the next legislative session amid criticism that the bill was rushed, poorly drafted, and did not go far enough in protecting gig economy workers.
In a development many wouldn’t find surprising, a collation of forces announced this week that they would like to see ride-sharing drivers for Uber and Lyft receive a guaranteed base wage, flexible benefits, and a new drivers’ association to lend a united voice to represent their interests. What is surprising? The two forces that joined to make this call were the leaders of Uber and Lyft themselves.