General Interest

Independent Contractor Bill Approved by Legislature; Governor Expected to Sign

Arguably the most hotly contested bill in the Capitol this year, AB 5 (Gonzalez, D-San Diego) put the Legislature squarely in the center of the debate on an issue that insects with the California Supreme Court, the gig economy, labor unions and independent contractors. Meant to codify the Supreme Court’s “ABC test” as a result of the Dynamex decision, the bill drew the ire of a host of employers including healthcare providers, truckers, pet groomers, psychologists and many, many others.

The landmark decision (Dynamex Operations West, Inc. v. Superior Court of Los Angeles), was decided in April 2018 and cast numerous new workers in the employer/employee relationship rather than the more flexible independent contractor role. The main target of AB 5 turns out to be gig economy workers, specifically Lyft and Uber drivers. While both Lyft and Uber have joined together to try to reach a compromise with the author, Assemblywoman Lorena Gonzalez reached no such agreement as the Senate approved the bill on a 29-11 vote. The was approved by the Assembly today and now goes to Governor Newsom who has previously expressed his support of the bill.

LeadingAge California has been part of a coalition working to improve the bill and address the issues that impact seniors and health care providers. LeadingAge California is concerned about the impact AB 5 would have on contracting with therapy providers and also the impact on shared ride services, which provide needed transportation options to seniors across the state. Both Lyft and Uber have thrown their support behind a statewide ballot initiative in 2020 that would leave it to the voters to decide how their drivers are classified.