THE CALIFORNIA ASSEMBLY passed legislation on Wednesday that could have a profound effect on hundreds of thousands of workers by requiring companies like Uber, Postmates, Amazon Flex, and others to recognize much of their workforce as employees entitled to labor protections and benefits. The proposed law cuts to the heart of one of Silicon Valley’s fiercest debates at the moment: Should tech giants be allowed to classify the legions of gig-economy workers their companies rely on as independent contractors, or should they be forced to regard them as employees, and compensate them as such?
Lawmakers in California appear to be overwhelmingly in favor of the latter. Less than a month after ride-hail drivers around the globe briefly went on strike on the eve of Uber’s IPO to protest low wages and their status as contractors, the bill was approved 53 to 11. It now moves to the state Senate.
Other states and cities have previously attempted to regulate gig-economy work, with proposals often targeted at a single industry. Last year, for example, New York City imposed a mandatory minimum wage and temporary cap on ride-hail drivers. California’s legislation is notable in its scope, which goes far beyond the tech economy.
…To designate workers as independent contractors under the bill, companies will have to prove the following: that they don’t control or direct the person’s work; that the worker’s services aren’t related to the company’s main business; and that the person is engaged in an “independently established trade, occupation, or business of the same nature” as the work performed.