Who’s an Employee in California? Worker Classification Explained

A California law that makes it harder for gig-economy companies, such as Uber Technologies Inc., and other businesses to classify their workers as independent contractors who aren’t guaranteed minimum wages, overtime, benefits, or other employment protections has again stirred the debate over the definition of employment.

The stakes of California’s law, also known as Assembly Bill 5, or A.B. 5, are high for companies, as it could disrupt the expansion and growth around business models that rely on contractors. Employers must either face higher labor costs by classifying their workers as employees, or risk an onslaught of lawsuits if they ...