California passes landmark bill that requires Uber and Lyft to treat their drivers as employees

California legislators have passed a bill that would treat workers at so-named gig economy corporations such as Uber and Lyft as workers, providing them access to enhanced wage and advantage protections.

The 29-11 vote passed on late Tuesday sends the bill — dubbed Assembly Bill 5, or AB5 — back to the State Assembly for final approval. Democratic Governor Gavin Newsom, who has maintained his help for the bill, is anticipated to approve it.

The proposal, anticipated to go into impact January 1, had drawn sharp opposition from ridesharing corporations and on-demand delivery firms. When Uber, which posted a record $5.2 billion in loss final quarter and laid off hundreds this week, filed to develop into a public firm, it told the SEC that its organization would be “adversely affected if drivers were classified as employees instead of independent contractors.”

The bill says that if a contractor’s perform is portion of a company’s normal organization, then they should be designated as workers. And hence, these workers will get access to far more protections such as minimum wage, the suitable to unionize, and overtime.

In an op-ed published in the Sacramento Bee on Labor Day, Newsom stated he supports AB5. “Reversing the trend of misclassification is a necessary and important step to improve the lives of working people. That’s why, this Labor Day, I am proud to be supporting Assembly Bill 5, which extends critical labor protections to more workers by curbing misclassification.”

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