California just got a lot closer to granting rights to gig workers.
Because they are independent contractors, gig workers — a wide-ranging category that includes rideshare drivers, nannies, and contract software engineers — don’t have the same legal rights as employees. They’re not entitled to a minimum wage, health-care benefits, or, in Philadelphia, paid sick days. If they die on the job, as food delivery courier Pablo Avendano did last year, their family isn’t eligible for workers’ compensation.
Labor advocates say many employers, including Uber, Lyft, and other on-demand platforms, purposely misclassify their workers to save money and relinquish responsibility.
That’s why a California bill passed Wednesday in the state Assembly seeks to make it harder to classify workers as independent contractors. It builds on a California Supreme Court decision from May 2018.
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If the bill becomes law, on-demand tech companies are expected to challenge it in court, as they have built their businesses on the independent-contractor model. The law also is opposed by small-business groups, which say it would crush business to classify certain workers as employees. And some independent contractors say they’re already feeling the brunt of the California Supreme Court decision, which has led some news outlets to stop commissioning freelancers because they fear breaking the law.
Philadelphia, for its part, is watching California closely.
The city, which has emerged as a leader in worker protection laws, is in the early stages of exploring a package of gig worker bills, Deputy Mayor for Labor Rich Lazer said at a gig worker organizing conference in March.
On Thursday, Lazer said his office gets many complaints about misclassification, and it’s not just from those working for on-demand tech companies. It’s a big problem in the construction industry, too, he said.
Rick Grimaldi, a labor lawyer with Fisher Phillips who represents employers, said the California bill shouldn’t be a problem for traditional businesses, which, he said, usually classify independent contractors properly. Uber and Lyft, though, are still navigating the complexities of their workforce, which means this law likely would have a bigger impact on them, he said.
“You’ve got a situation where gig economy businesses have created a disruption and nobody’s caught up yet,” he said.
But it’s even more significant because this is new territory. Local governments haven’t figured out how to serve gig workers. There have been some industry-specific laws, such as New York’s temporary cap on ride-share vehicles (which lessens competition for fares) and minimum wage for drivers. But cities and states have yet to take on gig worker protections as a whole.
Some states, such as Texas, have even weakened protections for gig workers — ensuring they would be classified as independent contractors, not employees — after lobbying from tech companies.