Governor Signs Bill to Secure Rights for Many “Gig” Workers

Gov. Gavin Newsom signed Assembly Bill 5 Wednesday, which firms up what constitutes an independent contractor versus an employee and beginning in 2020, many workers will be reclassified according to the new rules.

That’s music to the ears of many Uber and Lyft drivers who have been hard at work fighting for this day. They been out there striking, protesting and honking to grab the attention of the public and lawmakers, and it looks like their efforts have paid off.

The bill not only impacts the more than 1 million “independent contractors” in California — the effects are sure to ripple out to other states that have considered similar legislation, and it will certainly take a toll on some company giants who have for the past decade relied more and more heavily on the independent classification as a way to shore up profits and deny benefits like minimum wage and Social Security contributions.

There is a vast difference between the right to pick up random jobs, or gigs, to make ends meet and the way companies have capitalized on the classification to skirt fair treatment of workers and regulations. It is no coincidence that the number of independent contractors ballooned after the 2008 recession. Americans at the time were desperate for any paying work and companies seized the opportunity, disguising themselves as saviors. But as years passed, more and more companies that would once be considered traditional employers began shifting over to the new norm and more and more people have found themselves dependent on work that comes with no guarantees, benefits or basic labor rights.

SAN FRANCISCO, CA – MAY 8: Ride hail drivers march around the block in front of Uber headquarters in San Francisco, Calif., Wednesday, May 8, 2019, as the company prepares for its IPO. Photo courtesy of Karl Mondon/Bay Area News Group

The employee classification is a necessary step for workers who want the option to unionize, giving the once powerless the power of collective bargaining.

The implications of an unchecked gig-based economy are far reaching. Not only do individual ride-hailing drivers, couriers, meal delivery drivers, commercial truck drivers, janitors, nail salon workers, construction workers and franchise owners have to contend with a lack of things like health insurance and minimum wage rights, the misclassification has a direct impact on the entire country in terms of how we respond to unemployment trends and how successful we are in reaching climate change goals.

When independent contractors find themselves suddenly out of work, they are not officially considered “unemployed.” This misrepresentation skews the nation’s employment reality and results in fewer resources allocated when needed most. Given the growing share of Americans who depend on gig work, it is safe to say a large chunk of the population is unaccounted and uncared for. On an even larger scale, the misclassification of workers is becoming problematic on an environmental level.

University of California at Berkeley recently published a report that found the commercial trucking industry is missing the mark in its limitation of greenhouse gases. Vehicles contribute 40 percent of the state’s greenhouse gas emissions and heavy-duty vehicles comprise one-fifth of that total. Although the state has enacted stringent emissions standards (until today), commercial trucking companies are avoiding regulations by classifying their drivers as independent contractors and shifting the cost of truck ownership onto individual drivers.

It should come as no surprise that your average commercial truck driver is unable to shoulder the financial burden of maintaining clean vehicles and complying with other environmental regulations.

There will inevitably be backlash to the governor’s decision. Companies loathe to give up even a little bit of their ridiculous profits will fight back  and will attempt to make workers and consumers absorb the cost. Some workers will understandably be upset by the reclassification if being an independent contractor is working out well for their lives and financial situations. There are real-life consequences that should be considered, but if we allow companies to continue on this trajectory, the new norm will look a lot like the old: workers without rights and a planet well on its way to being uninhabitable.