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64% of California’s Independent Workers Now Employees: Report (1)

Nov. 12, 2019, 9:10 PMUpdated: Nov. 12, 2019, 11:57 PM

A new California law turned thousands of independent contractors into employees, including truckers, janitors, and gig workers, according to a University of California Berkeley analysis.

The UC Berkeley Labor Center brief notes that on-demand workers for such companies as Uber Technologies Inc. and Lyft Inc. who’ve received the majority of attention represent a fraction of workers covered under Assembly Bill 5. A.B. 5 creates a three-part test for determining when someone is an employee or an independent contractor.

About 64% of independent contractors—including janitors, maids, and other cleaners; truck and taxi drivers; and retail, grounds maintenance, and child-care workers—are presumed to be employees. These workers typically earn a lower hourly median wage of $18.87, the brief said.

The Nov. 12 report, the first to analyze the impact of A.B. 5 since its enactment, comes as gig companies await the California Attorney General’s office to approve the title and summary for a proposed initiative they’re bankrolling to diminish the law’s sway. The proposed “Protect App-Based Drivers and Services Act,” if it qualifies for the November 2020 ballot, purports to restore flexibility for gig workers. Labor has promised to defeat the measure, which backers filed after failing to blunt A.B. 5. The law codifies a California Supreme Court decision.

The California Labor Federation hopes the new law significantly reduces the number of workers misclassified as contractors, spokesman Steve Smith said.

“Some companies, undoubtedly, will continue to flout the law. In the case of Uber and Lyft, they’re signaling they’ll spend more than $100 million to avoid providing workers basic protections they are due under the law. We’re prepared to run a vigorous campaign to counter this massive spending by engaging voters directly through grassroots campaigning,” Smith said.

UC Hastings associate law professor Veena Dubal forecasts the initiative will fail.

“They are completely relying on the myth that AB5 would take away their flexibility. That is not true. Employee status is compatible with flexibility, and what’s more, their business model relies on the labor of flexible drivers,” Dubal said in an email.

The UC Berkeley labor researchers said the law will also apply to an additional 27% of contractors unless strict provisions are met, such as licensing requirements. Those jobs include construction workers; hairdressers, barbers, and other personal appearance workers; designers and other artists; writers, editors, and photographers; and sales representatives.

Some high-earning occupations such as doctors, lawyers, and accountants, with a median hourly wage of $41.57, aren’t covered by the law.

(Adds comments from California Labor Federation)

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com

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