The landmark reforms of California’s gig economy that ruffled the feathers of Uber, Lyft and other app-based companies last week has emboldened lawmakers in Washington and other states to enact similar worker protection laws.
“It’s not just a bright idea from left field,” Washington State Senator Karen Keiser told the New York Times, shortly after California senators passed the legislation on Wednesday. “It gives it a seriousness and weight that is always helpful when you’re trying to pass a new law.”
The bill, known as AB 5, requires some companies in the on-demand “gig” economy to treat thousands of self-employed contractors like regular employees by providing those workers with health insurance, overtime pay, unemployment and workers’ compensation benefits.
When the law goes into effect Jan. 1, 2020, it will also entitle gig workers to collect California’s $13 per hour minimum wage (set to increase annually to $15 per hour in 2022).
While Uber and other app-based companies have vowed to fight the law, some gig workers are already digging in their heels.
Hours after the bill passed, a California Uber driver filed a proposed class action lawsuit against the ride-share company for misclassifying its workers. The case could signal a coming wave of litigation for companies like Uber if other states pass similar versions of the AB 5 bill. In addition to Washington, New York and Oregon lawmakers are mulling similar gig economy reforms.
In Bellevue, workers from gig app companies including Postmates, DoorDash, Instacart protested outside Postmates’ engineering office Thursday as part of a nationwide “Pay Up” campaign, urging the food delivery companies to pay its drivers a $15 minimum wage plus expenses and tips and a breakdown of pay.
The rise of the “side-hustle” or “gig economy” has offered people a variety of new ways to earn money on the fly without being tied down to any particular employer; but that freedom can come at the expense of worker protections and benefits provided by traditional employers. Many companies have benefited from this arrangement through lower labor costs and less liability if their workers are injured on the job.
The California bill is a rare example of worker protection laws catching up with the disruptive technologies that have fueled the rise of the gig economy in the 21st Century.
Emery Reddy helps workers. Call us at if you have a question about your employment status, or if you have an L&I, workers’ comp, injury, or employment law claim. You won’t get better advice.