In response to California’s Assembly Bill 5 law which redefined the state’s consideration of independent contractors, gig economy companies including Lyft, Uber, and DoorDash are campaigning for an opposing ballot measure.
Worker Classification Within the Gig Economy
The proper classification of gig economy workers is debated. People who drive for companies like Lyft, Uber, and DoorDash argue that they are full employees of the businesses, and therefore entitled to overtime pay, sick days, workers’ compensation, and minimum wage. The companies claim that their drivers are actually independent contractors, and cannot receive those benefits — this is based partially on the fact that the employees set their own schedules and provide their own equipment (e.g. their vehicles). However, workers base their claims of full employment on the fact that Lyft, Uber, and DoorDash do exercise power over their work, and the gig economy business model centers on the labor of employees.
Assembly Bill 5
To address the lack of clarity surrounding the classification of workers within the gig economy, California lawmakers created Assembly Bill 5 (AB 5). The bill was signed into law in September of 2019. The law proposes specific qualifications for workers to be labeled as independent contractors.
Under the terms of AB 5, a worker is an independent contractor only if they meet all of the following conditions:
- “The hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work,”
- “The person performs work that is outside the usual course of the hiring entity’s business,” and
- “The person is customarily engaged in an independently established trade, occupation, or business.”
These terms classify Lyft, Uber, and DoorDash drivers as full employees and make them eligible for employment benefits, but the businesses are still attempting to label their workers as independent contractors.
Protect App-Based Drivers & Services Act
Lyft, Uber, and DoorDash are supporting the Protect App-Based Drivers & Services Act, which California drivers can vote on during the November 2020 election. If the ballot measure passes, gig economy businesses would be excluded from the AB-5 legislation. Additionally, the measure proposes some alternative benefits for employees in the industry. Although drivers (as independent contractors) would not qualify for benefits such as overtime pay and workers’ compensation, the measure “includes a guarantee that drivers would make 20% more than the minimum wage, and 30 cents per mile for expenses such as gas and vehicle wear and tear,” as well as “a health care stipend once a driver works 15 hours per week,” reported CNN.
Lorena Gonzalez, an assemblywoman of the state of California, criticized the ballot measure: “Their wage floor suggests if I'm a cashier, I'm only paid while there's a customer in my line, not when I'm waiting for the next customer."
Despite the attempts of companies such as Lyft, Uber, and DoorDash to continuously deny benefits to their employees, the misclassification is unlawful. Assembly Bill 5 will take effect on January 1, 2020.
If you are concerned that your employer misclassified you or denied you benefits, contact Donati Law, PLLC for a free evaluation of your case. Our attorneys represent workers’ rights in claims of wage and hour violations, workers’ compensation, contract breaches, and other employment law litigation.
Complete our contact form or call (901) 209-5500 to schedule a free consultation with our attorneys.
