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Will the new gig worker law change contract work?

On Behalf of | Oct 18, 2019 | Firm News |

Companies, such as Uber, use workers who are independent contractors. This is different than an employee because this type of worker does not receive benefits or other perks that come with being an actual employee of the company. However, California recently passed a new law about independent contractors that makes it a bit harder to put workers under this classification. According to Forbes, the sticking point is that in California, if a gig worker does work that is essential to the business operations, then that worker is an employee.

This is tough for companies because having workers reclassified changes the whole business structure and costs a lot of money. To keep employers as independent contractors, many companies will have to change their operations. Some companies, though, such as Uber, intend to fight and prove that their gig workers do not meet the definition the state has set for employees and, therefore, are still independent contractors.

While Assembly Bill 5 is not the law just yet, it will be at the beginning of 2020. Companies have some time to adjust, if needed. There is also time for companies to fight the law if they wish. The plan for Uber is to simply not reclassify workers and handle any legal issues as they come up.

Being an employee versus an independent contractor has pros and cons for the workers. Uber has, in the past, tried to work out deals to provide some benefits for its workers without giving them the employee designation, which would help provide at least one of the perks of being an employee. This information is for education and is not legal advice.