California bill giving protections to Uber drivers, other gig economy workers, moves ahead

The California Assembly is expected to give final consideration Wednesday to a bill that would provide new wage and benefit protections to workers at so-called gig economy companies such as Uber and Lyft where people pick up jobs on their own schedule.

The state Senate passed the measure with a 29-11 vote late Tuesday over strident Republican opposition. Passage by the Assembly would send the bill to Democratic Gov. Gavin Newsom, who has said he supports it.

If signed, the proposal could have national implications as politicians and businesses confront the changing nature of work in the so-called gig economy.

In a rare injection of presidential politics into a state issue, most of the major Democratic presidential contenders urged California lawmakers to pass the bill and have championed similar proposals in their campaigns.

The bill by Democratic Assemblywoman Lorena Gonzalez has drawn staunch opposition from on-demand delivery and ridesharing companies that say it will effectively kill their business model.

Drivers divided on the issue

The bill would put into law a California Supreme Court decision making it harder for companies to classify workers as independent contractors and instead would make them classify the workers as employees.

While its impact on gig economy companies has drawn most of the attention, it would affect a wide array of industries.

Let's be clear. There is nothing innovative about underpaying someone for their labour.- Marie Elena Durazo, Democratic Senator of Los Angeles

"Today these so-called gig companies present themselves as the so-called innovative future of tomorrow," Democratic Sen. Marie Elena Durazo of Los Angeles said as she presented the bill in the Assembly late Tuesday. "Let's be clear. There is nothing innovative about underpaying someone for their labour."

The law lays out a test to decide if workers can be labelled as contractors. The worker must be free from control of the company, perform work "outside the usual course of the hiring entity's business," and be engaged in an independently established trade, occupation or business of the same nature of the work they are performing.

Uber, Lyft and meal delivery companies such as Doordash and Postmates still hope Newsom can negotiate a new proposal with unions that would create a separate set of rules for gig workers.

They have proposed a base hourly wage for workers, paying into a fund for benefits including accident coverage and would allow for "sectoral bargaining," where workers across the industry could organize. Several of the companies have threatened to spend $90 million on a ballot measure next year if they do not get their way.

Maintaining flexibility at work

They've argued that making their workers employees would limit workers' abilities to have the flexible hours of their choosing.

Gonzalez says nothing in the law forces the companies to eliminate worker flexibility. As employees, the workers would be entitled to minimum wage and benefits such as workers compensation, unemployment insurance and paid leave.

Federal law still considers gig workers independent contractors, so it's unclear if a state law making them employees would allow workers to unionize.

Sen. Mike Morrell of Rancho Cucamonga was among Republican opponents of the bill, many of whom told emotional stories of their own entrepreneurial success.

"This is just another assault on the free market, and again, it is a slouch toward socialism when government controls what business does," Morrell said.