California legislators pass bill that reclassifies contractors as employees

The California state Senate on Tuesday passed a major bill that would require companies like Uber and Lyft give contract workers employee status.

The vote was 29-11, and the bill now heads to the state Assembly. Gov. Gavin Newsom (D) has expressed his support for the measure, and is expected to sign it. The law would go into effect on Jan. 1, with at least one million contract workers converted into employees, The New York Times reports. "Today, the so-called gig companies present themselves as the innovative future of tomorrow, a future where companies don't pay Social Security or Medicare," state Sen. Maria Elena Durazo (D) said. "Let's be clear: There is nothing innovative about underpaying someone for their labor."

Several labor groups have been calling for such a measure nationwide, saying contract workers are missing out on benefits and minimum pay that employees receive, and similar bills may soon be introduced in other states. Uber and Lyft say they have hundreds of thousands of drivers in California, and argue that as contract workers, they have flexibility not available to employees. Both companies have said that if they are forced to turn contract workers into employees, the added costs will cause their businesses to collapse, the Times reports.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up