AB 5 passed out of the California Assembly on May 29 and is now headed to the California Senate.
It’s a bill that would codify the ABC employment test used in California Supreme Court Dynamex case. In a recent post “Hard to Define”, I explored the background of several legislative approaches re defining employment status in a gig economy era:
The Assembly vote on AB 5 was 59 to 15, with 6 not voting.
While there will likely have to be further changes to AB 5 when it hits the California Senate, clearly the bill has momentum.
The stakes are enormous for some of the gig economy companies. The recent Wall Street debut of Uber and Lyft was underwhelming, and passage of AB 5 could be a substantial if not fatal blow to the business model of some lesser gig economy platforms.
Passage would ensure that many more workers are covered under California’s workers’ compensation laws.
Here is a link to an Assembly floor analysis that was done on May 24:
An article on the bill by Carolyn Said, San Francisco Chronicle business reporter, can be seen here:
Also interesting is a take on the issue written by seasoned California political reporter Dan Walters:
Walters notes that the gig economy issue is now playing out in disputes over whether public entities must make PERS contributions for certain temporary workers.
With almost every California union, business interest and public entity having a substantial stake in the outcome of how employment status is defined in California, AB 5 has the potential to be the mother of all legislative fights.
So far, however, the bill’s author, Lorena Gonzalez (D-San Diego), seems to be guiding the bill with a firm grip.