This week, Federal District Court Judge Dolly M. Gee denied an injunction blocking California’s Assembly Bill 5, also known as AB 5. The injunction had been requested by ridesharing company Uber and delivery service Postmates, two of the largest companies in the so-called gig economy. Uber and two other companies, DoorDash and Lyft, have launched a $90 million campaign to create a state ballot initiative for this year’s elections to exempt themselves from the law.
Weighing the Public Good
The companies argued that AB 5, which changes the rules for classifying employees as independent contractors, would deal irreparable damage to their businesses, which rely on a fleet of independent contractors in lieu of full-time employees. According to a report by the New York Times, Judge Gee acknowledged that the law has the potential to greatly damage the businesses, but ruled that their business’ needs do not outweigh the public interest.
Impacts on Independent Contractors
Although AB 5 was explicitly designed to target large gig-based tech companies like Uber and Postmates, many independent contractors have found themselves negatively impacted by the changes as well. The bill includes exemptions for certain types of contractors, including, doctors, accountants, and real estate agents, but other independent workers like writers and musicians are lobbying for broader exemptions of their own.
Stay on Top of the Latest Business Laws in California
Assembly Bill 5 has already had a profound impact on businesses in California and will continue to affect workers and employers as the law develops. Whether you are an independent contractor or a business owner, an experienced business lawyer like Brian A. Newman can help you ensure that you are always in compliance with state and national laws. Call (424) 254-5186 today to schedule a complimentary consultation with a Los Angeles County business attorney.