AB 5: Gig Economy Bill Heads to Governors Desk

Codifies landmark California Supreme Court decision to stop worker misclassification

SACRAMENTO – Today Assembly Bill 5, authored by California State Assemblywoman Lorena Gonzalez (D-San Diego) to restore employment status for more than a million workers who have been misclassified as contractors, passed the California State Legislature after a 61 to 16 concurrence vote in the State Assembly. AB 5 provides clarity for businesses, workers and taxpayers in the wake of the Dynamex ruling by the California Supreme Court in the 2018. The bill now heads to Governor Gavin Newsom’s desk for signature or veto.

“Today the Legislature made it clear: we will not in good conscience allow free-riding businesses to profit off depriving millions of workers from basic employee rights that lead to a middle-class job,” Assemblywoman Gonzalez said. “It’s our duty to look out for working men and women, not Wall Street and their get-rich-quick IPOs.”

Employers looking to cut costs at the expense of workers have misclassified more than a million Californians and in turn, we have seen income inequality increase, union membership decline, and the power of working people diminish.

This exploitative business practice has proliferated in industries such as trucking, delivery, janitorial and construction for decades. The advent of app-based companies and the “gig economy” has only further accelerated the practice of misclassification and resulted in declining working conditions and increased reliance on public assistance.

In California, almost half of workers who participate in the gig economy struggle with poverty. Further evidence suggests the shift toward relying on contractors, coupled with larger corporations reducing the wages of low- and mid-level workers, may have accounted for as much as 20 percent of the increasing wage inequality between 1989 and 2014.

A unanimous, bipartisan decision handed down last spring by the California Supreme Court was one of the most important in decades for workers with the potential to bring many workers into employee status, which offers more stability and security and the opportunity to organize. We will codify this decision with AB 5 and use it to rebuild the middle class.

Assemblyman Kevin Kiley Responds to Passage of AB 5

SACRAMENTO – Assemblyman Kevin Kiley (R-Rocklin) released the following statement in response to the passage of Assembly Bill 5 (Gonzalez), legislation that will fundamentally alter independent contracting in California:

“Uber, Lyft, and other ride-sharing companies have revolutionized transportation and attracted hundreds of thousands of drivers, yet today the Legislature passed a bill that threatens their continued operation in our state. Assembly Bill 5’s ban on most forms of independent contracting could be a death blow to the gig economy — limiting access to services we have all come to rely on, depriving workers of their jobs and freedom, and stopping the next innovative idea from ever getting off the ground.

“The future of work in a rapidly changing economy is a challenging topic requiring serious thinking and creative solutions. Unfortunately, today we took a giant step backwards. AB 5 offers no security or solace for millions of workers when the square peg of employee status simply can’t be hammered into the round holes of today’s on-demand economy, or whatever the economy of tomorrow may bring.”

Assemblyman Kevin Kiley represents the 6^th Assembly District, which includes the Sacramento, Placer, and El Dorado County communities of Cameron Park, El Dorado Hills, Fair Oaks, Folsom, Granite Bay, Lincoln, Loomis, Orangevale, Penryn, Rocklin, Roseville, and Sheridan.