Number of California independent contractors may shrink if AB 5 signed into law

A state legislative committee passed a landmark labor bill that could affect Uber and Lyft drivers by changing their employment status from independent contractors to employees plus many other workers. 

Though it has labor support, a lot of other industries are also opposing it as a life or death issue. If passed and signed by the governor, the bill, based on a state Supreme Court ruling last year, would rewrite labor law in a major way.

Michael Bernick, labor lawyer at the Duane Morris law firm in San Francisco, is former Director of the California Employment Development Department. "It's a big an earthquake and as furious a battle in Sacramento as I've seen over the past 40 years. The presumption changes and it becomes more difficult for companies to classify workers as independent contractors," he said. 

The bill, AB 5, still has a long way to go but not much time to get there. 

"It will go to the full Senate, the legislature probably the next week," said Bernick. "It has to by September 13th. So, we'll see a lot of movement, a lot of activity. I think, just in the next week or so."

Generally, independent contractors get no vacations, breaks, insurance, overtime and other benefits. "You need to pay your own taxes. You're not entitled to the same benefits and minimum wage requirements," said Bernick. But, what most people don't know is that rideshare drivers and others who work for so-called gig companies represent only a tiny fraction of California's independent contractors.

The UC Center for Labor Research says 8.5 percent of California's workforce, 1.5 million workers are full-time independent contractors; plus many more than that are part-time. 

Bernick says that includes newspaper and meal deliverers, many truckers, healthcare workers, doctors, dentists, investment advisors, stockbrokers, custodians, programmers, and many others to name a few. 

Many well-heeled opponents of AB 5 have gone on record saying, if they lose, they will take it to the voters next year and spend big money doing it. 

"They will go to the ballot and put at least 90 million in," said Bernick.

Uber and Lyft want their own law that favors the companies' position and have offered driver pay packages of $21 an hour, plus benefits and collective bargaining.