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September 18, 2019 08:05 pm

California Governor Signs Labor Law, Setting Up Bitter Gig Economy Fight

California Governor Gavin Newsom signed a sweeping new law that could force gig companies like Uber and Lyft to reclassify their workers as employees. From a report: The hotly contested legislation, Assembly Bill 5, dictates that workers can generally only be considered contractors if they are doing work that is outside the usual course of a company's business. The law codifies a 2018 state supreme court ruling, and applies it to a wide range of state laws. It could upend the business models of companies that depend on armies of independent contractors, who aren't guaranteed employment protections like minimum wage and overtime. The bill is slated to go into effect on Jan. 1. While the legislature has adjourned until next year, fierce lobbying and deal-making efforts are expected to continue in the meantime, and could potentially yield separate legislation in 2020. In a statement, Newsom called the bill "landmark legislation," and said that, "A next step is creating pathways for more workers to form a union, collectively bargain to earn more, and have a stronger voice at work -- all while preserving flexibility and innovation." Lorena Gonzalez, the state assemblywoman who authored the bill, said in a statement that, "California is now setting the global standard for worker protections for other states and countries to follow." Further reading: Drivers? Never Heard of Them, Says Uber.

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