How Does California Assembly Bill 5 Protect Rideshare Drivers?

California Assembly Bill 5 (AB5) has left thousands of workers in the state unsure about their professional futures. The Bill has faced considerable push back since it came into effect on January 1, 2020. It has faced challenges from both individuals currently working as independent contractors and the businesses and industries that employ them. However, it’s worth noting the benefits that come with this bill as well.

What Is California Assembly Bill 5?

California Assembly Bill 5 was passed in the state in 2019 and is meant to give more rights and protections to independent workers in the gig economy. It establishes new rules and requirements for classifying workers as either employees or contractors. Specifically, to qualify as independent contractors, workers must meet each of the following requirements:

• The worker is able to perform their services or duties without the direction or control of the employer.
• The worker must perform duties or tasks that are different than the employing company’s regular business activities.
• The worker must regularly offer the same services or duties that they perform for the employer on an independent basis.

Who Does the Bill Protect?

Another common name for California Assembly Bill 5 is the “gig workers’ bill.” Unsurprisingly, the protections of the law are meant to benefit gig workers like rideshare drivers. However, the law actually affects a wide range of California residents. Types of workers who were often misclassified as independent contractors who may gain more rights under this Bill include janitors, health aides, construction workers, hospitality workers, and others.

How Does the California Assembly Bill 5 Protect Rideshare Drivers?

The first thing to understand when it comes to how California Assembly Bill 5 will protect rideshare drivers is understanding the rights that are offered to employees that independent contractors aren’t guaranteed. Employees are guaranteed minimum wage, overtime pay, paid sick leave, paid family leave, unemployment insurance, workers’ compensation, and protections against sexual harassment and discrimination. There are also expenses that independent contractors incur that would otherwise be paid by an employer. For instance, the employers of independent contractors don’t withhold payroll taxes, so contractors have to pay Self-Employment Tax to cover their Social Security and Medicare costs. The bill is meant to help even the playing field for rideshare drivers and other independent contractors.

However, challengers of the bill argue that it will restrict the flexibility and freedom of workers who are required to reclassify. Others worry that they will lose their jobs entirely.

There are also concerns that California AB5 will create added costs for businesses and consumers. This is because reclassification could result in an estimated 35% increase in labor costs. There are also concerns that the bill could result in large numbers of rideshare drivers losing their jobs because they aren’t eligible for employment in the U.S. The I-9 process which must be completed by all employees requires workers “show your passport or social security card.” JDSupra estimates that as many as 25% of Lyft and Uber’s rideshare drivers won’t be able to meet that requirement.

What Are the California Assembly Bill 5 Exemptions?

Due to a massive push for exemptions prior to the law’s passing, there are actually many professions that are exempt under the California Assembly Bill 5. These exemptions cover workers including health professionals like dentists and doctors, insurance agents, accountants, lawyers, hairstylists, real estate agents, and many other creative professions. Lawsuits filed on behalf of independent truckers have also successfully sought judgments that the law can’t be enforced against them.

There are also exemptions built into the law that allow business-to-business contractors to avoid reclassification. There are two separate sets of 10 or 12 requirements the contractors will need to meet depending on their industry or profession.

It’s worth noting that, if these workers seek their exemption from Assembly Bill 5, they will still need to meet the requirements set under previous laws. Specifically, these workers will need to meet the requirements of the Borello-test before they are able to seek classification as independent contractors.

How Can Rideshare Drivers Seek Legal Help?

If you’re worried that California Assembly Bill 5 will negatively impact your livelihood, it’s important to begin planning now. If you live in California, you may need to begin taking action immediately, but rideshare drivers in other states may also wish to start thinking about how similar laws in their states will impact them.

The first thing you may want to do is consult with an attorney. Specifically, it may be helpful to seek out an attorney with experience in employment law, particularly as it applies to independent contractors. Your attorney can assist you with an audit of your work and management process. This can help you determine what actions you may need to take.

Join a Free Uber Lyft Misclassification Class Action Lawsuit Investigation

If you are an Uber or Lyft driver (active or inactive), you may have been misclassified as an independent contractor, and you may qualify to join this Uber Lyft Driver Misclassification Class Action Lawsuit Investigation.

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This article is not legal advice. It is presented
for informational purposes only.