California Gov. Gavin Newsom signed a sweeping new law that could force gig companies like Uber and Lyft to reclassify their workers as employees. Yet even before he signed the bill into law, it was already clear that lawsuits will abound. On September 11, 2019, Uber’s top lawyer announced that new law or not, Uber will not treat its drivers as employees. Tony West, Uber chief legal officer, pledged that its drivers will remain independent contractors. Gov. Newsom called the bill “landmark legislation,” and it is slated to go into effect on January 1. Under the new rules, workers must be employees if a company exerts control over how they perform their tasks, or if their work is part of a company’s regular business.
Under the new law, California workers can generally only be considered independent contractors if the work they do is outside the usual course of a company’s business. It is the new law’s focus on what is the regular business of a company that was designed to reach companies such as Uber. However, Uber says it is really a technology company, and other companies can be expected to make similar arguments.
Can Uber or Lyft claim its drivers are ancillary, or somehow not the core, the very reason those rideshare companies are operating? Uber’s chief legal officer says the company is a tech company, a marketplace, and not a provider of rides. It’s an interesting line to draw, and one some others are sure to follow into litigation. Having employees triggers federal and state tax withholding, anti-discrimination, health care, pension, worker’s compensation and unemployment insurance obligations. You avoid these entanglements by hiring independent contractors, or do you?
Read full article here: https://www.forbes.com/sites/robertwood/2019/09/19/ca-gov-newsom-signs-law-makes-gig-workers-employees/#176b1c265a02
