A measure to curb the widespread use of independent counterparts in the California economy came to a close in the Legislature on Friday, even as Uber, Lyft and other high school companies organized a fierce lobbying campaign to circumvent its reach.
Basic legislation that could set a precedent in a national battle to improve wages and benefits for low- and middle-wage workers would change the employment status of more than one million Californians.
Housekeepers, office downtown cleaners, truck loading trucks in Los Angeles and Long Beach ports, construction workers building new homes, manicurists, medical technicians, nightclub strippers and even software coders will be among the dozens of professions offered protection against long documented abuses in the workplace.
Bill 5 of Parliament, which enacts a rigorous test before companies can classify workers as contractors, released by a key fiscal commission on Friday in Sena TE. Both houses of the Legislature are expected to pass before lawmakers postpone September 1
If that happens, Govin Newsome's government is expected to sign the bill. "The governor is in favor of combating the misclassification of workers, which has been a driver of income inequality for decades," a spokesman for Newsom said.
Hundreds of companies are facing lawsuits and state penalties
treating workers as independent contractors, a national, decades-long trend that weakens wages, weakens unions, and contributes to what experts call a scorched workplace between irregular and unsuccessful people.
About 400,000 Californians are estimated to work either part-time or full-time for fast-growing technology platform companies offering a variety of services such as rides, food delivery, household repairs, and dog walks.
Application-based companies claim to offer different employment
model – innovative and flexible – and therefore should be released from AB 5. They say that as
contractors, their workers can set their own schedules and work for multiple companies. AB 5 can cost businesses millions of dollars,
impeding future profitability.
Any such concert company will be unlikely this year, but with aggressive power play, Uber, Lyft and DoorDash on Thursday threatened to spend $ 90 million on the 2020 newsletter unless legislation passes a new bill, which allows them to avoid classifying drivers as employees.
The California Federation of Labor, representing 1,200 unions with 2.1 million members, is committed to winning the effort, which, if carried out, could be one of the most expensive ballot campaigns in state history.  Newsom indicated that it could support the proposal by concert companies to create a special category of employment for app-based drivers, and its staff has been in talks with Uber and Lyft for months. "There were a lot of decisions in [AB 5] legislation, so there was a compromise framework," Newsom told reporters earlier this month.
In a letter this week, 75 law professors, economists and other scholars urged Newsom and lawmakers not to release
concert workers, writing that "California is ready to lead the country – in fact, to govern the world – with the strongest record law to protect workers from misclassification."
Contractors, including many from many billion technology companies dollars are not covered by laws guaranteeing a minimum wage, overtime pay, sick leave, family leave, unemployment and disability insurance, workers' compensation, and protection against discrimination or sexual harassment.
According to government officials, California loses about $ 7 billion a year in payroll taxes due to misclassification. In addition, companies do not pay Social Security or Medicare taxes for contractors. Los Angeles Strike Trucks ” width=”840″ height=”825″/>
Los Angeles and Long Beach harbor trucks have filed lawsuits and the California Labor Commissioner has fined carriers for misclassifying drivers. as independent contractors.
(Mark Booster / Los Angeles Times)
AB 5 was modeled on the California Supreme Court's comprehensive decision in 2018, which includes Dynamex Operations West, a national parcel delivery company that reclassifies its employees as independent contractors, forcing them to use their own vehicles and pay for gas and other costs – similar to the practices of Uber, Lyft, DoorDash, Postmates and Amazon Flex.
The court set a strict new test: Workers should be treated as employees rather than independent contractors if their workplaces are central to the company's core business or if bosses direct the way work is done. For example, an independent plumber with his own company who is hired by a bakery to remove leaks may be an independent contractor. But a plumber who works regularly for a plumbing company and is hired must be an employee.
The stricter standard, the court writes, must prevent businesses from escaping from "basic responsibilities" and from participating in a "race to the bottom." … result [ing] in unconventional wages and unhealthy conditions for workers. ”
By codifying this new test, AB 5 makes it less vulnerable to legal challenges and allows the state, not just the courts, to impose it.  During months of fierce business lobbying, the bill's author, Lorena Gonzalez (D-San Diego), narrowed its scope with changes that exclude some
professions, including doctors, lawyers, architects, engineers, accountants, insurance agents, brokers, hairdressers, freelance journalists and financial brokers.
The exceptions, in her view, allow for independent contracting "in professions where people have the opportunity to negotiate themselves. , "And where they own businesses in professions with no documented history of misclassifications and theft of salaries.
On Friday, the new changes addressed the problems of the auto industry, which filed a lawsuit in federal court seeking the annulment of the Dynamex ruling and were Owners who work for multiple companies – deliver deliveries to construction sites, for example, can be classified as independent contractors if they respond
But the changes do not release the thousands of port truck drivers who work for Southern California trucking companies who have been repeatedly charged with misclassifications and theft of salaries by public authorities.
] "Transportation has some of the worst offenders," Gonzalez said. "We will not remove employee protection."
Other provisions added on Friday include exemptions for dentists, orthopedists, psychologists, travel agents, payment processing, photographers, editors and commercial fishermen.
Despite Lobbying in California News Publishers Assn., Newspaper Claimants In
misclassification lawsuits were not released. (The Los Angeles Times is among the 500 members of the Association).
AB 5 has never been added to California's annual "kill job" list, a designation that often burdens legislation. This is because without the bill, the court ruling will remain in effect, affecting a far greater number of AB 5 companies and inviting more litigation.
"AB 5 is a compromise," said House Speaker and CEO Alan Zaremberg, "He deals adequately with certain professions but not many other situations. … Organized labor loves everyone to be employees. This is not necessarily realistic. "
The House, he believes, is" hoping for a legislative solution "for companies that deliver customers through an app.
So far, the votes for AB 5 have been largely divided on partisan lines. Democrats have largely supported the bill, and
Uber and Lyft drivers organize public protests against
multimillion-dollar executive pay
and shareholder divestment. However, some Democrats often equate with business suggesting that AB 5 does not provide workers with enough flexibility.
"We have to protect workers from exploitation," said Sen. Steve Glaser (D-Orinda). "But we also need to protect the right of people to be their own bosses, if that's what they want to do – as long as they set their own hours, charge whatever they want, and control their work product."
While Golden State prepares to impose its remarkable legislation, other countries are considering similar reforms. Several Democratic presidential candidates have approved AB 5, and similar legislation has been introduced in Congress.
Said Steve Smith, spokesman for the California Labor Federation, "The nation is watching what California does."