New bill to change how independent contractors are classified in California under scrutiny

Washington-DC

WASHINGTON, D.C. (NEXSTAR) – A new California law that reclassifies millions of independent contractors as employees seek to offer workers more benefits but it’s coming under new scrutiny.

“Uber and Lyft have been taking advantage of their drivers,” Representative John Garamendi, D-California, said. 

In its original form, AB 5, guaranteed millions of workers, from rideshare drivers to in-home healthcare workers and janitors would be entitled to overtime pay, health benefits and the right to unionize.

Congressman John Garamendi says many of California’s independent contractors find it harder to make ends meet.

“They have no control over their hours. A forty-hour workweek, gone. Overtime pay, gone. Benefits, gone. The gig economy – you may be able to survive, but that’s just about it,” Garamendi said. 

But since the original bill passed, dozens of industries have successfully sought to be exempted from it. 

Just last week, a federal judge ruled Truck Drivers, the largest group affected, are NOT subject to the law.

“A policy that requires all these different groups of workers to have to sue their own government to be able to keep working in the state they live is not a good type of policy,” Rachel Greszler said. 

Rachel Greszler with the Heritage Foundation says the gig economy law ultimately gives workers less freedom by making them employees of companies like Uber or Lyft.

“This is a choice based model, and so its letting people use the platform if they want to. The problem is instead of protecting workers, the result is you take away jobs,” Greszler said.

She says it’s a cautionary tale for other states looking to follow California’s model.

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