The California State Senate voted on Tuesday to pass a bill that would make it much more difficult for gig economy companies like Uber and Lyft to classify workers as independent contractors rather than employees, Reuters reports.
The bill, which was sponsored by California Assemblywoman Lorena Gonzalez and is backed by Governor Gavin Newsom, passed the chamber with 29 votes in favor and 11 votes against it.
Called AB5, the law has garnered national attention, largely owing to the size of California’s workforce.
Several Democratic presidential candidates have supported the measure, including senators Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont and Kamala Harris of California.
“By approving AB5, the California legislature solidified our state’s position as the national leader on workplace rights,” the California Labor Federation said in a statement.
The bill has come under sharp criticism by trade groups and so-called “gig economy” technology firms that rely heavily on the state’s 450,000 contract workers.
“We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need,” Lyft said in a statement.
The bill strikes at the heart of the “gig economy” business model of technology platforms like Uber, Lyft, DoorDash and others which rely on hundreds of thousands of independent workers, not full-time employees, to drive passengers or deliver food via app-based services, Reuters noted.
Backers of the bill, including labor groups, have argued that classifying these California workers as employees would be the fix to longstanding driver complaints about low pay and the lack of medical insurance and other benefits.
The bill next goes back to the Assembly for a final vote and then moves on to Governor Newsom for signature.
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