The California Senate has passed an historic bill that brings gig economy workers within a hair’s breadth of being reclassified from independent contractors to employees, reports Reuters. On Tuesday, the California Senate voted to pass AB5, which could see gig workers from companies including Uber, Lyft, DoorDash, Postmates, and Instacart become legal employees.
As employees, these current gig economy “independent contractors” would need to be offered a legally guaranteed minimum wage as well as other employee benefits like medical insurance, sick days, paid vacations, and more. In other words, AB5 could greatly increase the quality of life for gig workers in California.
But the bill would also raise the cost of doing business in the state for companies that rely on gig workers. It’s no wonder then that three of those companies—Lyft, Uber, and DoorDash—are spending $90 million on a planned 2020 ballot initiative that would exempt them from the law.
All this means that even if the law is passed, it may never help the people it was designed to if Lyft, Uber, and DoorDash can get their ballot initiative passed next year. And, of course, AB5 isn’t technically a law yet. Although it passed the California Senate hurdle this week, it now must go back to the Assembly for a final vote and, if it passes there, must be signed into law by Governor Gavin Newsom (who backs the bill).
Currently, California has an estimated 450,000 gig workers. If AB5 becomes law in that state, it’s likely other states could move to pass similar laws protecting gig workers.