California bill requiring companies to treat gig workers as employees advances

A bill that would require companies like Uber, Lyft and Doordash to treat their gig workers as employees, rather than contracts, passed the California Senate Tuesday.

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The bill now moves back to the California Assembly, which will need to approve Senate changes to the bill. Democratic Gov. Gavin Newsom has said he will sign the legislation.

The three companies promised to spend $90 million to force a ballot measure if the bill becomes law.

The bill, Assembly Bill 5, would significantly raise costs for companies that employee gig workers, at a time when Uber, for example, is losing wild amounts of money. Uber posted a $5.24 billion loss in its 2019 second quarter.

The California Senate voted 29 to 11 along party lines.

Companies would be required to provide their workers with benefits like unemployment insurance, minimum wage, workers’ compensation, paid sick leave and paid family leave.

Unions cheered the progress, with the California Labor Federation tweeting, “This is a huge win for workers across the nation!”

Some analysts say labor costs could rise 30 percent under Assembly Bill 5, and drivers could lose the flexibility to work whenever they want.


Uber reportedly offered in a draft bill to create a hybrid employment category that would guarantee a minimum pay floor and offer some benefits.