The gig economy, such as driving for ride-hailing services like Lyft and Uber, has provided economic opportunities. But, these opportunities also came at the expense of basic protections, like workers’ compensation. A bill passed by the California Assembly late last month may address this by adding new protections and incorporating standards adopted by the California Supreme Court last year.
Assembly Bill 5 would codify standards on whether a worker is an employee or independent contractor. It could lead to thousands of workers becoming classified as employees and make them eligible for minimum wages and overtime pay in addition to workers’ compensation. In addition to riding-hailing firms, it would also cover freight trucking companies.
The bill would incorporate a ruling by the state supreme court concerning Dynamex, a courier service that converted its drivers to independent contractors. In this case, the court adopted a test to determine whether a worker is an independent contractor.
This ABC test is comprised of three parts. The first consideration is whether the worker is free from the business’s direction and control. The second consideration is whether the worker performs work outside the entity’s business. The final consideration is whether the worker decides to do this work independently.
A sponsor of AB 5 claimed that it would also help ride-hailing drivers by setting a wage floor if they were considered employees. This would assist workers who suffer injuries at work and provide a substantial raise in wages. Union groups support AB 5. The bill currently provides exemptions to insurance and real estate agents, hair stylists and physicians.
Over 10 percent of workers in this country rely on the gig economy for most of their income, according to the Gig Economy Data Hub. This includes workers receiving income from temp agencies and contract work along with some freelance and on-call workers.
Workers who suffer an injury at work should seek legal assistance to determine their rights to compensation. An attorney can help them seek the compensation they are entitled to.