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Sunday, May 19, 2024 | Back issues
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Republicans Fail to Overturn California’s Independent Contractor Crackdown

A GOP bid to overturn a California law that reclassifies independent contractors as full-time employees working in the gig economy fizzled in committee Thursday afternoon.

(CN) — A GOP bid to overturn a California law that reclassifies independent contractors as full-time employees working in the gig economy fizzled in committee Thursday afternoon.

Shannon Grove, a Republican state senator from Bakersfield, wrote Senate Bill 806 that seeks to repeal Assembly Bill 5 — a state law that codified a state court decision that held most workers are employees and should be accorded the accompanying benefits.

“My bill will not create confusion or carve-outs, but rather provide clarity to the roughly 1 million independent contractors affected by AB 5 who just want to continue to work their own hours, on their own time,” Grove said during the hearing on Thursday.

Under AB5, workers are guaranteed minimum wage, overtime compensation and other benefits associated with regular employment.

AB 5 was signed into law by Governor Gavin Newsom, who presides over a state where many of the most affected companies like Uber and Lyft are headquartered. While the companies have lobbied heavily behind the scenes, their representatives did not speak during the hearing on Thursday.

Instead, freelancers who say the freedom and autonomy they have enjoyed as independent contractors have been curtailed by government overreach.

Lisa Rothstein, a freelance cartoonist, testified in support of repealing the law saying the law hurt her business while impinging on her choices.

“This bill has devastated millions of legitimate independent contractors,” Rothstein said.

Proponents of the law say companies are using independent contractor status to bypass giving retirement and health benefits to employees while raking in the profits off the backs of those contractors.

“I appreciate that independent contractors are upset,” Hannah Beth Jackson said, adding that the law was necessary to protect unscrupulous treatment of workers by companies in the gig economy.

The fact that SB 806 failed to get out of the committee on Thursday is unsurprising, given the enthusiasm for the original Dynamex bill on the Democratic side of the aisle.

But the fact there was a hearing at all is a sign of a growing backlash against the law.

“Unions have been after trucking forever,” said Kirk, a truck driver from Southern California. “I have been an owner-operator since I was 24. So after 28 years in business, AB5 is saying I can’t do this anymore?”

Kirk expressed the frustration of many freelancers who say that a law intended to curb a certain behavior by a couple of new companies has inadvertently swept up an entire sector of freelancers.

The American Society of Journalists and Authors and the National Press Photographers Association sued California in December, saying the Dynamex law would bring “significant new costs and disadvantages to the members” of the journalism organizations if they’re required to be classified as employees rather than freelancers.

The organizations seemed to ask for a carve-out for journalists and freelancers, who can only submit up to 35 stories to a given publication before they must be categorized as an employer under the new law.

While SB 806 was introduced to repeal AB 5, the sheer number of bills that seek to alter or amend the bill shows that it’s a work in progress.

Many of the bills stop short of dismantling the central provisions of the law, but seek to exempt certain industries like pharmacists and wedding planners. Assemblywoman Lorena Gonzalez has said she takes constructive efforts to improve the bill seriously and will work with her colleagues to amend its provisions to make it more palatable.

But on Thursday, many testified for the need for the law. Sara Flocks, with the California Labor Federation, said Uber and Lyft are dodging hundreds of millions of dollars in unemployment insurance because of how they categorize their workers, an especially important fact given the current pandemic and the lockdowns in California cities.

The state is also not backing down from enforcing the law, particularly as it applies to the gig economy. The state sued Uber and Lyft in early May, saying the companies do not compensate their drivers for vehicle maintenance, routine breaks or for the time they spend monitoring their apps to pick new customers.

Thursday made clear that any Republican attempt to undo a law that has garnered a fair share of criticism appears doomed to fail, but more attempts to refine and whittle that law appear to be in the offing.

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Categories / Business, Consumers, Government

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