California
passes landmark law protecting “gig workers”
Following is
a statement by Rebecca Smith, director of the Work Structures program at the
National Employment Law Project:
“The passage of
AB5 in California is a resounding victory for workers and responsible
businesses in that state and across the nation. California is paving the way
for other states to ensure that workers are not carved out of the employee
rights and benefits that they need and deserve. Against a no-holds-barred,
money-is-no-object campaign, workers showed big tech that even in its
birthplace, it can’t run over workers in its quest for profit.
“AB5 uses the clear and fair ‘ABC test’ to determine when a company must be accountable to workers as its employees. It will lift up the wages and benefits of janitors, nail salon workers, construction workers, landscapers, nannies, homecare workers, ride-hail and truck drivers, delivery workers, and many others.
“Today, we celebrate the passage of AB5 and honor the workers, advocates, and legislators who stood up to big business. Tomorrow, we roll up our sleeves. We must work together to enforce both new and existing laws, raising wages and ensuring that workers’ compensation, safe workplaces, paid sick days and paid leave, and protections against discrimination and harassment are available to all workers.
“Critically, we
must deliver collective bargaining to all workers to make sure they can
negotiate with the boss for higher standards, and the way is open for
innovative new strategies to do just that. Working with allies, we can reverse
yawning inequality, dismantle a legacy of structural racism that pervades the
labor market, and build an economy that works for all of us.
“Next up: New
York State, where NELP has joined a coalition of labor and community organizations working
to pass a similar ‘ABC test’ bill. Our fight is just beginning, but California
shows that when workers organize, they can win even against tech behemoths.”
Background on
ABC Test
The ‘ABC test’
is commonly used by courts and government agencies around the country to
determine employee status. In addition to California, three states currently
use an ABC test to determine employment relationships for all wage and hour
laws: Massachusetts, New Jersey, and Vermont. Nine more states use the test for
some sectors (typically construction), and more than half the states use the
test in their unemployment insurance laws.
Under the ABC
test, businesses that seek to treat workers as independent contractors must
show that the workers: (A) are free from control and direction by the hiring
company; (B) perform work outside the usual course of business of the hiring
entity; and (C) are independently established in that trade, occupation, or
business.
A true
independent contractor is someone who runs her own separate business, sets her
own rates, builds a customer base, and takes on the risk of business failure.
The vast majority of workers in our country are not running their own
businesses. They are employees, often of powerful corporations.
Here’s the
difference between the rights of an employee and those of a contract “gig”
worker:
An employee who
is injured on the job has the right to workers’ compensation; a non-employee is
on her own.
An employer pays
into Social Security, contributing to an employee’s secure retirement; 1099
workers finance their own retirement.
An employee who
is subject to sexual harassment on the job is protected by federal laws against
discrimination; a contractor is not.
In some states,
an employee who gets sick or has a baby has paid leave for the time she needs
to take off from work; a non-employee can only take a day off if she is willing
to take a pay hit.
FURTHER READING:
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The National
Employment Law Project is a non-partisan, not-for-profit organization that
conducts research and advocates on issues affecting low-wage and unemployed
workers. For more about NELP, visit www.nelp.org. Follow NELP on Twitter
at @NelpNews.
