After months of bickering over who would be covered by a landmark bill meant to protect workers, California legislators passed legislation on Wednesday that could help hundreds of thousands of independent contractors become employees and earn a minimum wage, overtime pay and other benefits.
But even before California’s governor, Gavin Newsom, had signed it into law, the battle over who would be covered flared up again. Uber, one of the main targets of the legislation, declared that the law’s key provisions would not apply to its drivers, setting off a debate that could have wide economic ramifications for businesses and workers alike in California, and potentially well beyond as lawmakers in other states seek to make similar changes.
Under the bill, workers are likely to be employees if the company directs their tasks and the work is part of the company’s main business.
California has at least one million workers who work as contractors and are likely to be affected by the measure, including nail salon workers, janitors and construction workers. Unlike contractors, employees are covered by minimum-wage and overtime laws. Businesses must also contribute to unemployment insurance and workers’ compensation funds on their employees’ behalf.
Mr. Newsom has said he intends to sign the bill but has indicated that he would be open to negotiating changes or exemptions with businesses like Uber and Lyft if they were willing to make other concessions. That has added to the air of uncertainty about the law.
Uber said Wednesday that it was confident that its drivers will retain their independent status when the measure goes into effect on Jan. 1. “Several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces,” said Tony West, Uber’s chief legal officer. He added that the company was “no stranger to legal battles.”
In order to classify drivers as contractors, legal experts said, Uber would also have to prove that it didn’t direct and control them, and that they typically operated an independent driving business outside their work for Uber.
So, Uber, which sets the rates for its drivers, and compulsively monitors their performance
Historically, if workers thought they had been misclassified as a contractor, it was up to them to fight the classification in court. But the bill allows cities to sue companies that don’t comply.
Here is a thought: If your business cannot succeed without cheating and abusing your employees, maybe your business should not exist in the first place.