California’s Assembly Bill 5 legislation was signed into law this week by Governor Newsom. There are a number of reasons why the new law is ineffective.
on the law noting the complexities of enforcing it, particularly the test, since the “usual course” of business is not defined and the test lacks judicial precedence for guidance.
It’s a curious choice for California to model their legislation on a law that failed to re-classify Gig Economy platform workers as employees elsewhere. is an existing law that makes it unlawful for companies to misclassify workers. This law puts its money where its mouth is.
The law has been in effect since January 1, 2012 but so far has not been used to challenge worker misclassification at Uber, Lyft, or other Gig Economy platform companies.: The primary problem with worker classification in every state, and within the federal government, is thatto decide which workers are employees and which ones are independent contractors. This legislation perpetuates that problem. AB5 relies on criteria that are undefined, subjective, and therefore unenforceable as written.
If California wanted a law that could be implemented and enforced, it should have clearly and objectively defined the key terms of the ABC test.: AB5 does not tell businesses that they must reclassify their workers as of January 1, 2020. Instead, the new law allows cities and the state to challenge a company’s worker classifications through legal action.
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