Newsom Signs Bill Rewriting California Employment Law, Limiting Use of Independent Contractors – LA Times

EVA Issues in the News

John Myers, Johana Bhuiyan, and Margot Roosevelt of the Los Angeles Times cover the signing into law of Assembly Bill 5 (AB 5) in an article originally published on September 18, 2019. The article discusses how this landmark ruling in favor of workers’ rights protections might impact the California economy when it is officially enacted in January 2020. The new law is a huge step forward for protecting workers in the gig economy to ensure their access to fair work conditions such as guaranteed minimum wage, paid sick leave, and health insurance. While AB 5 has faced some push back from businesses such as ride sharing apps and other tech companies, this law helps to recognize protections for workers who were previously overlooked. Read the following excerpt and click through to the full article for more detailed information.


California businesses will soon face new limits in their use of independent contractors under a closely watched proposal signed into law by Gov. Gavin Newsom on Wednesday, a decision praised by organized labor but unlikely to quell a growing debate over the rules and nature of work in the 21st century economy.

Newsom, who signed Assembly Bill 5 in a private ceremony in his state Capitol office, had already committed to embracing the new law. Legislators gave final approval to the sweeping new employment rules before adjourning for the year last week.

The new law “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” Newsom wrote in a signing message released by his office.

The new law “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits.”

Gavin Newsom, California Governor

Under AB 5, which will take effect Jan. 1, Californians will be considered to be employees of a business unless an employer can show the work they perform meets a detailed set of criteria established by a California Supreme Court ruling last year. Under those criteria, a worker is an employee if his or her job forms part of a company’s core business, if the bosses direct the way the work is done or if the worker has not established an independent trade or business.

The ruling and new state law raise the bar for companies that otherwise might rely on freelance or contract work. California’s bill is arguably the strongest of its kind in the nation, giving the state and cities the right to file suit against companies over misclassification, overriding the arbitration agreements that many businesses use to shield themselves from worker complaints.

Assemblywoman Lorena Gonzalez (D-San Diego) speaks at a rally after her measure to limit when companies can label workers as independent contractors was approved by a Senate committee July 10. (Rich Pedroncelli / Associated Press)

The new law’s supporters point to audits conducted by state employment officials that found almost 500,000 workers were wrongly treated as independent contractors. Much of the early legislative debate on the bill centered on low-wage sectors of the California economy.

“As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow,” Assemblywoman Lorena Gonzalez (D-San Diego), the author of AB 5, said in a written statement.

But while the legislation began as a way to formalize the 2018 court ruling, it quickly became the focus of a high-stakes lobbying effort over which kinds of jobs and industries deserved exemption from the new rules. Doctors, accountants, architects, real estate agents, travel agents, graphic designers and investment advisors — along with many other professions — will not be subject to the strict employee rules under the new law.

Read the full article at LA Times.


Issues in the News highlights news items focusing on key issues for poor and low-income families, from fair work and access to health care to family economic security, criminal justice reform, voting rights, and more.

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