California governor signs law that could require gig companies to classify independent...

Polycount

TS Evangelist
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This means that, among other things, drivers who fit the appropriate criteria could be entitled to certain benefits like minimum wage protection, health insurance, overtime compensation, as well as paid vacation and sick days. As of writing, most Uber, Lyft, DoorDash, or Amazon Flex drivers have to handle all of these expenses for themselves; regardless of how many hours they put into their jobs.

If they're unable to support themselves fully, gig workers will often turn to government assistance programs; which ultimately costs taxpayers, according to bill sponsor and California Assemblywoman Lorena Gonzalez. Whether you agree with that assessment or not, the bill in question -- Assembly Bill 5 (AB5) -- was officially signed into law today by California Governor Gavin Newsom.

So, how does AB5 work? In short, the law applies the three-part "ABC" test laid out in California's 2018 "Dynamex" legislation to independent contractors. If all three parts of the test apply to a given worker, they can be considered a contractor. If not, they will be considered an employee, and must be treated as such by companies. The test is as follows:

An independent contractor must...

  • ...be free from the control and direction of the hiring entity in connection with the performance of the work.
  • ...be customarily engaged in an independently established trade, occupation, or business.
  • ...perform work that is outside the usual course of the hiring entity’s business.

Several occupations are, by default, exempt from AB5, including "direct sales salespersons," real estate licensees, commercial fisherman, insurance agents, and others. And, of course, many companies that may be perceived to fall under the scope of AB5 will undoubtedly argue that they pass the test. Uber's Chief Legal Officer Tony West has made precisely that argument, in fact.

"...several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces," an excerpt from West's full statement reads.

There are obviously two sides to every story, and in this case, Uber and gig-oriented companies at large are not the only ones with concerns surrounding AB5. Several freelance workers, who perhaps only perform tasks for Uber, Lyft, or Amazon Flex part-time, appreciate the flexibility the roles offer.

Some such workers have expressed concerns that AB5 will negatively impact this flexibility. Further, if the likes of Uber are forced to classify many of its drivers as employees, they could attempt to pass the costs on to consumers.

We'll simply have to wait until the smoke from this legislation clears in 2020 before we can say for sure how AB5 will impact California's economy.

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Uncle Al

TS Evangelist
In many states the law states that if an employee is not a self acknowledged "independent contractor" or "consultant", the company they are working for must offer them full time employment. For some reason California didn't do that, probably because if the very high number of off shore employee's supporting the Tech industries. If the Fed tries to step in on this one, it's clearly a states rights issue that has been tested in Federal Courts on a number of occasions. With the newest fight that Trump wants to pick; if the courts follow past practice, California is completely within it's rights to regulate the auto industry but that one will most probably go to the Supreme Court .....
 
Not quite. All the law does is re-affirm what the 9th Circuit already ruled, which was essentially "if workers are doing a core company function, they are employees, not contractors".
It's amazing when we can literally see how liberal policies in government interfering with free market economics create less opportunity and stunt economic growth.

That turd Diblasio in NYC pass restrictions on ride share licences because the city wanted the money it made from Taxi Medallions instead. No one wants to ride yellow taxis anymore.
 

gamerk2

TS Maniac
It's amazing when we can literally see how liberal policies in government interfering with free market economics create less opportunity and stunt economic growth.
According to people like you, "free market economics" equates to "ignoring all wage laws to increase profits". No thank you; economic growth is driven by rising wages, not falling ones.

That turd Diblasio in NYC pass restrictions on ride share licences because the city wanted the money it made from Taxi Medallions instead. No one wants to ride yellow taxis anymore.
The restrictions were driven by a massive increase in traffic caused by Uber/Lyft (and yes, there is a **** ton more then there used to be). And Taxi's are being run out of business by Uber/Lyft undercutting them by not paying their "employees" at least minimum wage.

There's a difference between competition because you are more upscale, convenient, or cheaper within the bounds of the law. But Uber/Lyft are trying to make money by ignoring said laws and classifying it's entire workforce as "independent contractors" so they can not pay them minimum wage, despite remaining in control of how much of their fares each of their "employees" are allowed to keep (which, as the 9th Circuit noted, is the exact antitheses of what an Independent Contractor is supposed to be).

This is *exactly* why our economy has been so screwed up for so long; we undercut our workers, put more and more wealth in the hands of a few individuals, and wonder why the economy is stuck growing at ~2.5% every year.
 
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According to people like you, "free market economics" equates to "ignoring all wage laws to increase profits". No thank you; economic growth is driven by rising wages, not falling ones.



The restrictions were driven by a massive increase in traffic caused by Uber/Lyft (and yes, there is a **** ton more then there used to be). And Taxi's are being run out of business by Uber/Lyft undercutting them by not paying their "employees" at least minimum wage.

There's a difference between competition because you are more upscale, convenient, or cheaper within the bounds of the law. But Uber/Lyft are trying to make money by ignoring said laws and classifying it's entire workforce as "independent contractors" so they can not pay them minimum wage, despite remaining in control of how much of their fares each of their "employees" are allowed to keep (which, as the 9th Circuit noted, is the exact antitheses of what an Independent Contractor is supposed to be).

This is *exactly* why our economy has been so screwed up for so long; we undercut our workers, put more and more wealth in the hands of a few individuals, and wonder why the economy is stuck growing at ~2.5% every year.

The ideology you are promoting creates welfare states.

No thank you.

The economy can't grow infinitely. We have boom and bust cycles based on supply & demand.

Do me a favor and stop using fake News channels/ media circuses to determine how the economy is doing.
 
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gamerk2

TS Maniac
The ideology you are promoting creates welfare states.

No thank you.

The economy can't grow infinitely. We have boom and bust cycles based on supply & demand.

Do me a favor and stop using fake News channels/ media circuses to determine how the economy is doing.
Funny, you're the one spouting conservative talking points without even attempting to back it up. I'd ask you why you oppose a state that actually gives a damn about it's citizens standard of living, but I have a suspicion I'll just hear back the typical talking points that boil down to "GOVERNMENT BAD UNRESTRICTED CAPITALISM GOOD".

I also note you ignored my large economic point in its entirety: I never said recession don't happen, I was complaining about the consistently low economic growth we've had since the end of the Nixon administration (aside from Clinton), which just so happens to coincide with the period where the western world walked away from Keynsian economics (again, aside from Clinton; I'm positive there's no possible correlation there...).