California Bill: Uber and Lyft Required to Treat Workers as Employees

Understanding The Bill

Over the years, drivers under Uber, Lyft, and many others have not been successful with these apps. California legislature approved Assembly Bill 5, back in the year 2019, requiring app-based companies like Uber, Lyft, and Doordash treat workers as employees. It’s aim is to make it harder for companies to classify workers as independent contractors rather than employees. This bill on a 2018 California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, establishes the “ABC test” for determining whether a worker is an independent contractor or an employee.

Workers must be an employees instead of contractors if a company retains control over how they perform their tasks or if their work is part of a company’s regular business. California will become the first state to require app-based companies/gig-economy to treat workers as employees. Overall, AB 5 marked a pivotal shift in California’s approach to worker rights, particularly within the gig economy, and its influence continues to shape debates about labor classification in the state and beyond

Will Uber/Lyft Drivers Be Able to Set Their Own Scheduling?

Accordingly, some experts say that nothing in Assembly Bill 5 will require employees to work set shifts, meaning that Uber and Lyft legally have to allow drivers to make their own scheduling decisions. This California Bill is to better help employees for Uber and Lyft, and other third party companies that offer delivery services for food, groceries, and or client transportation.

Also see Uber Insurance Explained