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Photo taken on Oct. 20, 2014, in New York shows a screen shot of the smartphone app for Uber car hailing service.
Image: picture-alliance/Kyodo

California signs law against Uber labor practices

September 18, 2019

So-called independent contractors may have to be reclassified as employees under a new law. Lawmakers in other states are looking to California as a possible example to emulate.


Californian lawmakers on Wednesday approved a new law that grants employee status to rideshare drivers and other workers in the so-called "gig economy."

Governor Gavin Newsom said it was "landmark" legislation that was a first step toward enabling more workers to unionize.

"The hollowing out of our middle class has been 40 years in the making and the need to create lasting economic security for our workforce demands action. Assembly Bill 5 is an important step," he said.

It would grant new pay and benefit protections to people working for tech giants such as Uber and Lyft. Currently they are treated as independent contractors, meaning they are not entitled to minimum wage or benefits such as workers compensation.

The new law outlines a three-part test, making it more difficult to classify workers independent contractors.

Labor activists celebrated the new law. "Big thank you to all the gig workers, union members and activists who spent countless hours rallying to deliver this historic win," the California Labor Federal said in a message on Twitter. "We proved when working people stand together, we win!"

Read more: German transport minister ready to welcome Uber by 2021

Uber will fight against law

Uber says forcing its drivers to become employees could compromise a service that relies on flexibility. General counsel Tony West told reporters the company would not reclassify workers when the law comes into effect on January 1, instead it would defend itself in the courts.

"Just because the test is hard does not mean we will not be able to pass it," he said.

The laws have interested leaders in other states who see it as a potential model for combating the labor practices of tech giants.

New York Governor Andrew Cuomo, a Democrat, as well Democratic presidential candidates have indicated interest in pursuing a similar measure.

aw/se (AFP, AP)

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