Gov. Gavin Newsom signed Assembly Bill 5 into law today, a decision designed to transform many independent contract workers in the state to employees and affecting many businesses – such as ride sharing services.
AB 5, authored by Assemblywoman Lorena Gonzalez, codifies the state Supreme Court’s ruling last year on Dynamex Operations West Inc., which resulted in a new test that in effect outlaws many independent contractors, presumably prompting businesses to hire them as employees.
“In his signing message he talked about protecting workers and that the next step is to ensure the right to form unions and collective bargaining,” said Stuart Waldman, president of the Valley Industry and Commerce Association.
“That shouldn’t be the goal of this legislation, so that’s unfortunate. The goal should be to protect the workers who aren’t being protected.”
Last-minute exemptions were made for certain occupations, most recently freelance writers and photographers, to join other professions such as licensed insurance agents, investment advisers, medical professionals and hairstylists.
“As the business community, we’ve had some victories. We were able to get some exemptions for a lot of industries that are important to us,” Waldman added.
VICA, with the help of the Reason Foundation, one of its members, helped get freelance writers and photographers on the list during a recent advocacy trip to Sacramento.
Other contractors weren’t so lucky. Those involved in California’s app-based technology sector, including Uber, Lyft and DoorDash, were not exempted. In response, these same companies opened a campaign last month with a $90-million contribution in favor of bringing the issue up to voters in a 2020 ballot measure.