back to article The gig (economy) is up: New California law upgrades Lyft, Uber, other app serfs to staff

The California Senate has passed a new gig-economy law that may force app companies like Uber and Lyft to treat certain workers as employees rather than independent contractors. The new law, AB5, is set to come into effect on January 1, and is likely to have a significant impact on the app economy, including on bug bounty …

  1. TaabuTheCat

    About time

    Finally. It looked like a duck, walked like a duck and quacked like a duck. But the tech bros said it was a Zebra, honest it was.

    How long before they buy legislation at the Federal level to override this decision?

    1. Yet Another Anonymous coward Silver badge

      Re: About time

      So what about Hollywood and the music business?

      Do we have to go back to the studio system with actors and technical staff be permanent exclusive employees of the studio? Or will they just create a new company for each production and fire everyone at the end of the shoot?

      1. MacroRodent Silver badge

        Re: About time

        > Or will they just create a new company for each production and fire everyone at the end of the shoot?

        I think they already commonly do this. Film credits frequently list companies with the film title or something related in their name. Others listed are then specialist companies, for props, sound, special effects, catering etc.

      2. Anonymous Coward
        Anonymous Coward

        Re: So what about

        I seems to me that no one is much worried about people in the gig economy on good money; it's only those exploited at the bottom of the payscale that need protection.

        I don't know how the legislation is designed, but perhaps there could be an exclusion based on rates of pay over a certain threshold; although this might not be very easy to implement the necessary detail.

        1. maffski

          Re: So what about

          'It seems to me that no one is much worried about people in the gig economy on good money; it's only those exploited at the bottom of the payscale that need protection.'

          So you have to ask yourself why do people capable of earning good money choose to do so as independent contractors? And from there ask yourself if those at the low end are really being exploited or they simply don't have the skills to be higher up the pay scale.

          Force a business to pay more than the job is worth and eventually the job just doesn't exist.

          1. Anonymous Coward
            Anonymous Coward

            Re: if those at the low end are really being exploited

            Those at the low end are presumably those with generic, widely available skills, who cannot "just get a better job/ upskill" so easily (because of personal or financial constraints), they are essentially forced to take whatever offer they get; therefore they are easy to exploit; therefore they *are* often exploited by the ruthless. This differs from those people with skills where demand exceeds supply, who can defect to a better offer.

          2. Adelio

            Re: So what about

            Allow a business to pay loo little for people to live on and that business will probably try and do just that!

            I am so glad I do not live in the U.S.A. It may be the land of the free but only if you are RICH, RICH, RICH everyone else is buggered,.

          3. jilocasin
            Black Helicopters

            Re: So what about

            As a society we have decided that workers, regardless of their skill level, are entitled to a certain base level of pay and certain other protections (in the US of A that would be things like social security and workers' compensation, unemployment insurance, etc.). Unfortunately capitalism, while a great motivator, has a lousy endgame. Taken to its logical conclusion, one person/company controls everything, and everyone else is just, well, not in a good place.

            Originally you had to pay 'full price' (ss, wc, ub, etc.) for just your full time employees. The idea being that the majority of the workforce would be employed full time with some part time workers for seasonal or occasional work. I am sure you can guess what's happened in recent years. In some establishments the majority, if not the entirety (minus a manager or two) of the work force is now part-time. I've heard a worker mistakenly believe that they are 'full time' workers, because that's what their boss has told them. For example; "my company says that 'full-time' is 32 hours a week". Unfortunately it's only much later where they discover that while 'their company' considers that full time, the government doesn't, so no unemployment benefits, not accrual into their social security, etc. Of course you have to have 'open availability' so you can't even juggle more than one of these faux full-time jobs.

            The 'gig-economy' is just the next logical progression. If as an employer I am required by law to pay my employees a certain minimum wage and contribute to certain benefits. I can pay less of these if I only employ part-time workers. That means that I don't have to pay _any_ of them, if I just reclassify them as 'not' my employees. I still get to tell them; what to work on, how to work on it, where to work on it, how much to change for it, and what systems, programs, etc. to use while doing it, but they are 'only contractors' (nudge nudge, wink wink).

            If I am an independent contractor; programmer, doctor, lawyer, plumber, then I get to choose who I work with, what work I do, what tools I use, what and how much payment to accept, etc. You can't say that of the Uber / Lyft / Amazon Flex / Door Dash, string of companies. The plan is pretty much all the same. Come up with a system, usually containing an app of some sort (seeing how ubiquitous cell phones are even among the lower classes), that lets you effectively manage a remote workforce. Take a standard job; cab driver, delivery person, house cleaner, and *don't* hire a large work force. Have them do the work of whatever market you are in (at the 20-30% cost savings in labor), and collect your money.

            That's B.S.

            They are employees plain and simple. They are entitled to the same minimum protections as any other employee. The fact that they may not have specialized skills or realize that they are being taken advantage of doesn't negate that fact, it just makes it all the more important.

            1. Claptrap314 Silver badge

              Re: So what about

              US Social security requirements kick in based on how much an employer pays an employee per quarter. (And it is pretty low.) This is trivially known to anyone who has done any research in that segment of the market. As you either don't know this, or are lying about it, I don't have any reason to credit your stated views.

              1. jilocasin
                Boffin

                Re: So what about

                Actually social security was just one of the several examples I had chosen, and probably not a very good one at that.

                Affordable Care Act requirements change based on the number of full-time employees (or equivalents) you employ and workman's compensation employer contributions in most states (Texas being an outlier) are based on the average employee's salary. Guess what happens if you hire lots of part-timers instead of fewer, higher paid full-timers? Yep, it's cheaper to hire part-timers.

                Also, while the requirements to collect unemployment benefits vary from state to state in the US of A, it's generally determined in part on the employee meeting a minimum paid amount as measured against the average full-time wage. So what happens when you get fired/laid off from your faux full time job? You've been paying for unemployment that you aren't eligible to take advantage of.

                Finally, as you are well aware, independent contractors (the subject of my response and the original article) are specifically _excluded_ as a group from those that an employer has to pay taxes, including social security (which being well researched in the area I am sure you already know). So mis-classifying your employees as independent contractors improperly removes that obligation from the employer leading to a marked saving in labor costs.

    2. rcxb Bronze badge

      Re: About time

      It looked like a duck, walked like a duck and quacked like a duck

      But if it's a doctor, engineer, architect, fishermen or hair stylist, it's still not a duck. Make sense to everyone?

      Don't include all the loopholes in the laws in the first place, and you won't be constantly going back and closing them when their abuses become high profile.

      1. Anonymous Coward
        Anonymous Coward

        Re: About time

        Loophole up here in Canada to encourage GPs in small towns. They are self employed and get to do simplified accounts. Makes sense if you are a single GP in middle of nowhere.

        But it also allows surgeons working only in an NHS type hospital to pay their wife/kids as staff and make a tax loss on their salary.

      2. I ain't Spartacus Gold badge

        Re: About time

        rcxb,

        I think it's easier to get exceptions to the law if you're not an obvious pisstaker, and there's less of an asymetry in the relationship.

        In gerneral, fishing boat owners aren't rich either. Their lives are just as precarious as the peole working on their boats. And that's also true of hair salon owners who rent their chairs. And as a hairdresser you can always build up your own clients and either rent your own small shop - or go to people's houses and do it as a mobile worker. But it's not like your boss is a multi-billion dollar company exploiting thousands of you - they are a small player in a big market just the same as you are.

        The problem is we want companies to be able to take on a bunch of extra people temporarily - because they've got something that needs fixing by specialists or because they've got varying levels of work. I'm in the building services industry and it's common for architects and engineers to be on 6-month contracts and only stay for one or two contracts then move on as the work drops off. The small practises wouldn't be able to take on more work if they couldn't do this - and would risk going bust at higher head-counts.

        So maybe we need to structure these laws based on the asymetry of power and money. Small companies get more leeway, as they're basically sharing the same risks as their employees / contractors - often more if their house is security on the business finance. Large mega-corps get none. But equally if you're paying a contractor $100 an hour then it's much less of a problem and they're more likely to have choices available to them - than someone on $10 an hour driving a cab.

    3. ma1010 Silver badge
      FAIL

      Re: About time

      Uber does not believe it is affected by the Golden State's legislation, and so it doesn't have to change any of its practices.

      You can also choose not to believe in the law of gravity and jump off a tall building. Go for it, Uber!

      1. I ain't Spartacus Gold badge

        Re: About time

        Jump off a tall building? Uber do. Repeatedly. So far they've always landed on a massive pile of their VC backers' money, and been fine. This money trampoline doesn't seem to be going away for them any time soon...

        At the moment their only viable route to profitability is self-driving cars. Anyone want to take a bet that those will be legal on normal roads in the next decade?

    4. Charles 9 Silver badge

      Re: About time

      "It looked like a duck, walked like a duck and quacked like a duck."

      What if they said it was a goose with a duck call?

      1. I ain't Spartacus Gold badge

        Re: About time

        What if they said it was a goose with a duck call?

        Then roast it and see if it tastes like a duck.

        1. jake Silver badge

          Re: About time

          Somehow I doubt that duck calls taste like duck ... not even with goose spit in them.

  2. LDS Silver badge
    Joke

    It's even worse!

    Now all "Microsoft insiders" in California should become employed testers!!!!

  3. This post has been deleted by its author

  4. Vector

    Knee Jerk

    While I agree that there is a problem which needs to be addressed, this one size fits all approach is about to hand me the short end of the stick.

    I work for a small music tech company in California. I've been talking with them for the last year and a half about working remotely so I can move out of state. Because of Workman's Comp issues associated with home offices (there is actually a case where a woman got compensation because she tripped over her dog while working from home), most companies up until now have made remote workers independent contractors just to limit their liability. My company was more than willing to make up for the benefit losses I would see in changing my status and I was quite happy with the proposed arrangement.

    Now that's all been thrown up in the air because (with a few limited exceptions) everyone must be an employee regardless of the situation.

    Thanks, California!

    Much love,

    V

    1. JohnFen Silver badge

      Re: Knee Jerk

      "most companies up until now have made remote workers independent contractors just to limit their liability."

      But are they really independent contractors, or are the companies doing this just fudging a bit in order to reduce their costs? If the company is setting the work hours, providing the equipment, and forbidding the "contractors" from doing similar work for other companies (among other things), then they aren't really independent contractors no matter what the company may claim.

      (I'm talking generally, not about the California ruling)

    2. Anonymous Coward
      Anonymous Coward

      Re: Knee Jerk

      The I tripped over my own dog case, a judge made an idiotic ruling which was easily overturned. Don't kid yourself about your employers ACTUAL intentions.

      1. Vector

        Re: Knee Jerk

        "Don't kid yourself about your employers ACTUAL intentions"

        Perhaps you missed it but this is not my employer bending me over. I initiated this request. I would be perfectly happy with the arrangement. My employer is actually being more than fair in their offer.

        It's not about them trying to take advantage of me. It's about not having increased insurance liability just so I can work from home.

        1. JohnFen Silver badge

          Re: Knee Jerk

          "It's not about them trying to take advantage of me."

          No, it's them abusing the tax laws.

          1. jake Silver badge

            Re: Knee Jerk

            "No, it's them abusing the tax laws."

            Then fix the fucking tax laws and stop fiddly-farting around with people's livelihood!

            (I should perhaps note here that I do not support uber/lyft in any way, shape or form ... What I am talking about is individual humans who are getting hurt by this one size fits all legislation that quite clearly hasn't been fully thought through. The current crop of idiots in Sacramento are stupider than any bunch that I can remember in the 50ish years that I've been voting ... I believe the phrase "fools rush in" is appropriate here.)

    3. Youngone Silver badge

      Re: Knee Jerk

      My company was more than willing to make up for the benefit losses I would see in changing my status and I was quite happy with the proposed arrangement.

      By benefits I assume you mean that awful shit-show Americans refer to as "health insurance".

      In which case your employers will be happy to provide it until the moment you have an accident or get sick. After that you'll be on your own.

    4. GruntyMcPugh Silver badge

      Re: Knee Jerk

      @Vector

      I presume your employer doesn't pay you below minimum wage because of your 'contractor' status. (fyi, from the article: "As an independent contractor, you are not entitled to a range of benefits including minimum wage,")

      So, you know, this legislation is going to make life better for millions of people who get treated poorly, therefore I can't really summon a great deal of sympathy for people who get to work from home, have no commute, and slosh coffee all day (and I was that guy for a decade).

      1. jake Silver badge

        Re: Knee Jerk

        Grunty, it's going to wreck Vector's livelyhood. And that of many more people. Including many of the uber/lift drivers who CHOOSE to work part time, as they see fit, just to make an extra few bucks to help make ends meet. For a lot of this kind of worker, the gig economy is the difference between paying rent and being out on the streets. This legislation ensures they are out on the streets.

        1. I ain't Spartacus Gold badge

          Re: Knee Jerk

          jake's got a point. Just because Uber are a bunch of exploitative scumbags, doesn't mean that everyone is getting screwed.

          There's been a big campaign in Blight about zero hours contracts and how evil they are. And, of course, in some cases they are.

          But the ONS regularly survey the workforce nationally. And ZHC's fluctuate around the level of 2 or 3 percent of the workforce and have for years. And 70% of the peole on them (from the last report I read a couple of years ago) were perfectly happy with what they were getting. i.e. they were asked do you want more hours or even a full-time job. And while some people do - it was about 20% wanted a full-time job and 10% wanted more hours - the rest were getting roughly what they wanted from the arrangement.

          So we need to be careful to structure our laws to stop the abusive practises - while still allowing companies and workers to come to mutually beneficial arrangements.

          So the thing we really need to stop is big companies who control large parts of the market from simply using this as a way to cut costs.

          [Warning! Incoming big old horrible generalisation alert!]

          It's a bit like the difference between European and US employment laws. In the US you've a lot less protection and job security, in general. This is worse for you. However the US economy generally pulls out of recessions much more quickly than the European economies do, because companies can get people in earlier and start to recover, knowing that if the recession comes back again they can get rid of them. But European companies are more cautious, because the costs of firing are higher.

          The result is the US gets a few percent extra growth every economic cycle, which adds up to them being richer than us over the long term, at the price of more stress for workers.

          And of course now you get this resulting in job security inequality in Europe. Where the state and heavily unionised (with generally older workers) in places like France (and to a lesser extent) Germany still get all the benefits of old, but young workers are left out in the cold with loopholes and mini-jobs and temp jobs. So you've got young voters desperate for change, and older workers wanting to keep things like they were in the past - in a system they're still benefiting from but most people under 40 aren't.

          1. LDS Silver badge

            Re: Knee Jerk

            There's a big difference between France/Italy/UK unions and Germany ones. The former are heavily politicized and often work against the workers' interest to achieve political and ideological victories, often in their own self-interest.

            In Germany unions are part of companies boards and workers get a larger share of companies profits. Germany has also a school system better built to prepare people for their jobs. Not surprisingly, Germany kept a large manufacturing industry with better pays than other countries - and a far stronger industrial sector, while its welfare worked without creating debt.

            Anyway I don't know if a country where a lot of people have to work 16-18 hours a day over two-three jobs is really "out of recession" - looks to me it has deep problems it can't address - and the actual political situation is a clear symptom of it.

            And what is the social cost of firing people without any safety net? Try to put yourself in their shoes...

            1. I ain't Spartacus Gold badge

              Re: Knee Jerk

              And what is the social cost of firing people without any safety net? Try to put yourself in their shoes...

              In a country that has a flexible labour market and is growing from recessions faster, they should find it easier to get into another job. So it isn't just a simple decision of strong social safetynet = good - evil-neo-liberal markets (red-in-tooth-and-claw) = bad. There are costs to that stronger welfare state, and it's possible that it works well in the short-run, but over decades makes everyone poorer. Which isn't necessarily a reason not to do it, but is something you need to think about.

              In Scandinavia they tend to run their markets pretty freely - and I believe it's pretty easy to sack people. But they also have high taxes and a very strong welfare state, so you've got something of the best of both worlds. More chance of good economic growth, more chance of finding another job, less stress about getting sacked - because you can live off your generous unemployment benefits (that's what all them taxes are for) until you find something else.

              Another reason the US grows quicker from recessions is that US business gets a majority of its capital from the markets and investers - rather than from banks (as in Europe). And banks are incredibly risk-averse during recessions - even when the same management take stupid risks during the boom. In the jargon banks tend to be pro-cyclical (they make booms bigger and busts worse). So that makes it harder to say whether labour-flexibility is worth the costs - one of the things that makes economics so bloody annoying to study.

              There's another reason for flexible labour markets being a good idea. People hate taking pay cuts. They will rarely do it. You may think this is a good thing, but actually it can be very bad. Because companies who don't have enough work to pay their staff go bust, and that makes recessions snowball and get worse. So if you can't sack people easily, you'll be less willing to hire - slowing growth - but also you'll bend your whole business to surviving the recession and paying those wages - rather than trying to invest in the future and win more work. I see this a lot in the construction industry. During recessions, people "suicide bid". They take jobs at a loss, to keep the company going for another year in the hopes of making it to the next boom. This distorts the market, and risks them going bust anyway , but also means the well-run companies can't get work without suicide-bidding. Then you get whole chains of companies going bust all at once, taking out suppliers, that's what turned the 90s recession in the UK from a normal cyclical recession into a horrible 2-3 year nasty one.

              The Eurozone can't survive without more flexible labour markets. Because the Euro causes asymetric shocks to the various countries by its very design. And all having one single monetary policy makes this worse. Then if the governments don't have the ability to counter the wrong monetary policy by deficit spending (which they often don't because they're effectively borrowing in a foreign currency) - the thing that has to take the strain is wages. Wage-cuts can quickly equalise the productivity gap, and help to bring those economies back into equilibrium. But people won't take wage cuts - which is why austerity failed to improve productivity in many Eurozone countries as hoped - and so the alternative is currently their employers going bust. Whereas if they could sack people and make themeselves competitive again, they would survive (paying their remaining staff the same wages) and new companies could risk recruiting the ones they'd sacked because they'd be cheaper.

              So this is a bad thing you might say. People have lost jobs and now get less money, even if they do get new ones. But the recession is then shorter, as more companies hire and more survive and more people are in work (if poorer) and so you get out of recession faster and wages can start going up again quicker. Sometimes the policy choice that sounds nice, is so counterproductive that it actually becomes nasty.

              1. Roland6 Silver badge

                Re: Knee Jerk

                @I ain't Spartacus

                Q: And what is the social cost of firing people without any safety net?

                A: In a country that has a flexible labour market and is growing from recessions faster, they should find it easier to get into another job.

                I see you totally missed the question and answered a different question, you must be a politician in real life!

                1. I ain't Spartacus Gold badge

                  Re: Knee Jerk

                  Roland6,

                  And does the US have no social safety net? Oh, I do believe it does have one. So what we're discussing is degrees of difference. The Scandinavians score highest on all the great places to live stats with very low employee protections but very good social safety nets.

                  1. Roland6 Silver badge

                    Re: Knee Jerk

                    >And does the US have no social safety net?

                    So what is the social cost?

                    No bones about what you have said, just that social costs tend reflect the view of the individual citizen, namely: poorer job security, having to take the first job offered, higher levels of financial stress etc.

                    Sorry, but my mistake, I should of put a "tongue in cheek" emoji against my politician jib in my original comment.

                    1. I ain't Spartacus Gold badge

                      Re: Knee Jerk

                      Roland6,

                      What's the social cost? Heaven knows!

                      My first lesson in economics was about "utils", which is the notional economic unit of happiness / satisfaction. So you can do things like say, this icecream gives me 2 utils. And I think that the exchange rate should be £1 to 1 util. Therefore I'll pay anything up to £2 for it, but not a penny more. Except if it's baking hot, when I might go up to £3. But if I've already had one icecream I probably only value the second one at 1 util, so will only pay 50p for it.

                      I lost quite a lot of faith in economists during that lesson...

                      But it is a good example of how it's really hard to put a monetary value on stuff that's still really important.

                      You can sort of make approximations. So you look at countries that don't have a social insurance system and see how much people save for their old age and unemployment or health problems. Then try to extrapolate what that means as to how much they value a bit of security over not having it.

                      Or you can look at the US, where people will sell food stamps for below their market value in order to get cash, which they can spend how they want. Which shows that people prefer control over their spending over total amounts of stuff they can get - although of course that could be just because of addiction issues. I don't know enough about the US benefits system.

                      How do you measure happiness?

                      Also how do you measure the present risk and uncertainty of job losses against the future lower risk of that due to extra economic growth. Assuming that cutting job security will lead to enough economic growth to be worth it. And here again we're back to my lack of faith in economic measurement. We can't even measure GDP all that accurately.

              2. GruntyMcPugh Silver badge

                Re: Knee Jerk

                @I ain't Spartacus

                Care to qualify that general 'in Scandinavia' reference, because in Sweden they gave workers added protection from being fired via the 'Employment Protection Act'.

        2. LDS Silver badge

          "the gig economy is the difference between paying rent and being out on the streets"

          Sure, it is based on a lot of jobs paying wages that doesn't allow people to live on a single job and have to work two-three just to pay the rent.

          Can't you see there's something inherently wrong in society if that happens? Why it didn't happen fifty years ago and happens now? Maybe because more and more companies off-sourced jobs to external companies that used loopholes to compress wages and pay people nuts?

          That's why more and more are requesting a law-imposed minimum wages, because the "market" utterly failed to pay people decent salaries because it was too busy to broadly increase executives pays.

          The law should ensure people are able to pay rent and food with a single lawful job, or the society fails - and we're already seeing the consequences.

          1. Charles 9 Silver badge

            Re: "the gig economy is the difference between paying rent and being out on the streets"

            "The law should ensure people are able to pay rent and food with a single lawful job, or the society fails - and we're already seeing the consequences."

            Two sides to the coin. The law should ALSO ensure employers are able to pay their leases and operating expenses so they can stay in business and hire the people so these people can actually get PAID, or the society fails - and we're already seeing the consequences.

            It's a dilemma, basically: a zero-sum game to an extent. Protect the workers and the employers tighten belts, meaning employees suffer. Give the employers the free reign they need to survive and the employees suffer. Either way the proles suffer.

          2. Carpet Deal 'em Bronze badge

            Re: "the gig economy is the difference between paying rent and being out on the streets"

            Sure, it is based on a lot of jobs paying wages that doesn't allow people to live on a single job and have to work two-three just to pay the rent.

            Can't you see there's something inherently wrong in society if that happens? Why it didn't happen fifty years ago and happens now? Maybe because more and more companies off-sourced jobs to external companies that used loopholes to compress wages and pay people nuts?

            If you look fifty years ago, you'll probably find minimum wage just as unlivable - because there was no need for it to be. The real outrage(and problem in need of solving) is that people have been reduced to trying to make a living off it, rather than being able to move up in the world before they had to.

        3. GruntyMcPugh Silver badge

          Re: Knee Jerk

          @Jake: "Grunty, it's going to wreck Vector's livelyhood."

          Er, no. Looks like he'll still have a job at the end of this, and be earning more than minimum wage. The T&Cs might change a bit, and I'm sure with a bit of negotiation, like signing some waiver about tripping up over canines, the working from home thing can be solved by the adults involved.

          As for this putting Uber drivers on the street, how? Uber still need drivers. It changes their T&Cs, but not the fact that Uber still need a meat sack at the wheel. Uber will screw those drivers over in an instant if they perfect autonomous driving anyway, so please stop defending Uber.

          1. jake Silver badge

            Re: Knee Jerk

            I'm not defending uber/lyft. Far from it. I dislike the methods both companies have used and are using to do what they do. I hope both go under, and soon.

            HOWEVER, I am even more against passing ill thought-out laws that seriously affect individuals who are legally trying to make a living. This is one of those laws.

    5. Tom 38 Silver badge

      Re: Knee Jerk

      I work for a small music tech company in California

      If you work for them, you're an employee. Of course they'd like you to work for them like an employee, but be on the books as a contractor, they'd no longer have to pay SST, Medicare, FUTA and CA ETT.

      1. Vector

        Re: Knee Jerk

        "Of course they'd like you to work for them like an employee, but be on the books as a contractor, they'd no longer have to pay SST, Medicare, FUTA and CA ETT."

        In my case, all that money my employer wouldn't pay anymore would have gone into my pocket so I could cover those expenses along with additional money to cover my health insurance and other lost benefits. What they were trying to avoid was increased workman's comp premiums just because I was doing the job from home instead of a "controlled work environment."

        As I said in my original post, AB5 is a one size fits all fix to a problem that needs to be addressed. But when one size fits all, it generally fits poorly. For me, since I would have been able to move to a place where my living expenses would be cut in half, this bill isn't protecting me from anything but a better quality of life!

        1. Roland6 Silver badge

          Re: Knee Jerk

          AB5 is a one size fits all fix to a problem that needs to be addressed.

          Well reading through AB5, it does seem to contain a lot more detail than the UK's IR35 rules, the only question is whether it can be codified into a simple on-line questionnaire so that employers and employees can readily understand whether their arrangement is inside or outside of AB5.

          Mind you, given government revenue is at stake, I'm sure the US authorities will be as tricky as the UK's HMRC and judge many arranegements that appear to be outside are actually inside and backdated employee taxes are due.

    6. Anonymous Coward
      Anonymous Coward

      Re: Knee Jerk

      If you don't live in California or you are incorporated, then you are OK. In your case, the best bet would be to incorporate, eg. create an LLC and have a contract drawn up that specifies the LLC is providing X service to your employer. A side effect of that is that it will have a positive impact on your taxes....

      That's how both our corporate counsel (who just fought & won a contractor vs employee lawsuit) and a employee-side lawyer specialized in employment law have interpreted the regs so that we could continue to use contractors.

      Thing is, no one actually knows how the courts will interpret this for independent contractors in highly paid sectors (like software developers). While I agree with the intentions of the law, it's also creating all kinds of collateral damage & uncertainty.

  5. niio

    So fifty industries with crony ties to Democrats get exemption from the law, but the companies upsetting to unions don't. Corruption much?

    1. Yet Another Anonymous coward Silver badge

      No politics.

      Like single payer health = stalinism

      Government paying farmers = capitalism

      1. niio

        Single payer health would equate to single grower food, and that would be Stalinism. The Farm Bill is just corruption.

        1. veti Silver badge

          Why are you willing to accept single-payer provision for policing, courts, defense and fire protection, but when it comes to healthcare, that's "Stalinism"? Why draw the line there?

          1. Youngone Silver badge

            Why draw the line there?

            Probably just repeating what he heard on Fox & Friends.

          2. Charles 9 Silver badge

            Because the ones you've listed have historical connections to corruption and extortion. "Nice house you have there, ahem..." Courts and police are tied to the laws which are under the sole purview of government, so they're under the government, too, by necessity. Healthcare has neither going for it.

            1. LDS Silver badge

              Would you like something easy to compare to healthcare? Schools. You can't have a real democracy without a public single-payer education system. Which, not surprisingly, is under attack too from those who are at the top or the pyramid and don't want those at the bottom trying to climb it.

              1. Charles 9 Silver badge

                "Schools. You can't have a real democracy without a public single-payer education system."

                Sure you can. Why can't it be done with private schools?

                What I was saying was healthcare has no direct connection to the government. There is no explicit mandate, unlike law enforcement (which ties to the police and the courts and the jails).

                Perhaps that's why the Founding Fathers originally insisted you have some land in order to vote: to make sure you had some actual skin in the game.

                BTW, if you're worried about the people at the top cutting the runs of the ladder, you're playing the wrong game; you're trying to blame the owner of the casino when what you should be considering is changing the game altogether.

            2. veti Silver badge

              Err... you don't think healthcare is linked to corruption and extortion? Suggests you haven't been paying much attention lately. And healthcare is tied to public health, which is necessarily a public (shared) good - if there's an outbreak of, say, cholera in your city, it's very much in your own interests that it gets dealt with quickly and effectively, even if you and yours may have ironclad health insurance for yourselves.

              1. Anonymous Coward
                Anonymous Coward

                Not necessarily. Unless it's a true, existential-threat pandemic, why should the State care, especially when populations are so high? Times of prosperity tend to follow culls.

  6. Paul Hovnanian Silver badge

    OK

    So where's my taxi cab? Big yellow Crown Vic with a back seat that smells like sweat, cigarettes and cheap booze.

    1. BGatez Bronze badge

      Re: OK

      Try mass transit

  7. Ptol

    Its about time....

    There is a place for independent, self employed professionals, providing consultancy services to multiple customers. However companies have turned this into an employee lite kind of employment. Governments have been fighting back for a couple of decades because it affected their tax revenues, but its only because of the huge number of voters that are now involved that governments are starting to look at the potential for abusive working arrangements.

    Let’s face it, even as a highly skilled IT contractor, you take work at the rate of pay, working at times and in the style directed by the end customer.

    1. This post has been deleted by its author

    2. Kernel Silver badge

      Re: Its about time....

      "There is a place for independent, self employed professionals, providing consultancy services to multiple customers. However companies have turned this into an employee lite kind of employment."

      I'm not sure of the exact details, but in New Zealand this has been implemented in such a way that if the work you do a s an independent contractor is solely for one company, then you are deemed to have the same rights as an employee of that company, but if your work is spread out more or less equally over a number of companies then you are a contractor - although that also has it's own set of employment rights attached to it.

    3. Yet Another Anonymous coward Silver badge

      Re: Its about time....

      1st rule of el'reg don't talk about IR35

    4. Anonymous Coward
      Anonymous Coward

      Re: Its about time....

      I've spent most of the last three decades effectively working as an "independent consultant" in the IT world, but about halfway through that the company I was doing most (but not all) of my work with decided that running lots of one person suppliers was a drag and decided to work with suppliers who could keep a whole area going, rather than individuals. It was hinted to me but some people there that they wanted to carry on working with me and a number of my friends and that either we should all go and find a consulting firm to work for and then come back as a block, or that I should form a company, which I duly did. All the paperwork now has to go through me but I basically pay my friends what they earn less a small amount to cover some of the costs of the an administrator/paperwork/banking/insurance/accountants etc... it doesn't cover my costs, but hey we've all got work we wouldn't have had otherwise (so, think commune rather than company). I'm not based in California, but I wonder how some regs like this would affect my situation. The article suggests that the employment costs are 20-30%, I don't take anything like those fees. The whole business model we operate as a group wouldn't work and we'd all be out of a job - unless we could pass the liability on up the chain to the companies we consult for,

      1. John Brown (no body) Silver badge

        Re: Its about time....

        "The whole business model we operate as a group wouldn't work and we'd all be out of a job"

        Maybe rather than a semi-informal consultancy company you should re-organise as an employee owned co-operative.

        1. Paul Hovnanian Silver badge

          Re: Its about time....

          "employee owned co-operative"

          Use the partnership model that law firms use. Because in spite of the best(?) efforts of the California legislature, they will leave a loophole for their fellow attorneys. Like sharks, they don't eat their own young. ..... Or do they?

      2. ckm5

        Re: Its about time....

        If you were in California, the solution is that all of your 'friends' either need to be partners (as someone suggested, the law firm model or something similar like a coop) or have their own companies that are contracting to you.

        At least that's what several lawyers, including one that counsels employees, have advised us.

        Then again, IANAL, and you should ask yours about this if it is an issue. That said, if you are in a place where this might become an issue, I would try to get ahead of it....

    5. jake Silver badge

      Re: Its about time....

      "Let’s face it, even as a highly skilled IT contractor, you take work at the rate of pay, working at times and in the style directed by the end customer."

      I do? News to me. Here I thought I had been setting my own rates and hours and getting the job done as I felt was required these last 30+ years, like every other contractor/consultant in the IT world that I am aware of.

      1. Korev Silver badge

        Re: Its about time....

        If you set your rate to $20000/hr for a Chief Coffee machine tester role how many companies do you think would snap you up?

        1. ckm5

          Re: Its about time....

          Depends on what the liability is of a failing coffee machine and if you can present a cogent argument about the ROI of testing.

          There are plenty of scenarios where testing labs charge the equivalent of more than $20,000/hr. I'm quite sure UL would likely charge you more than $25k/hr equivalent.

          I remember putting something through a certification (not UL, this was for software) and it cost $1 million. It took 3 weeks and, if you just count straight hours, it was about $9k/hour. Thing is, I've very sure they spent around 40/hrs of actual work on it, which is about $25k/hr. Most of the cost was just getting their stamp of approval....

          1. Charles 9 Silver badge

            Re: Its about time....

            Thing is, what was the cost of the testing vs. the cost/value of the device being tested? Paying $20K to test a $20 coffee maker is ridiculous, but when it a $20M piece of machinery meant to last decades and having a legal testing requirement in order to operate, that's another story.

            What was the value of that system that required $1M worth of testing?

  8. Pascal Monett Silver badge
    Flame

    "[Uber] does not believe it is affected by this legislation"

    Well then, why fight it in court ?

    Uber and Icann, walking hand in hand, believing they can redefine the world.

    Well ya can't, assholes. It's about time you get your wake-up call.

  9. 2Nick3

    No more double-dip?

    So if you are on the clock for Lyft you can't also be on the clock for Uber? Nice - no more drivers picking up my ride and having to drop off their current passenger first.

    It's always frustrating watching the car icon in the app drive the wrong direction...

    1. Gaius

      Re: No more double-dip?

      You aren’t “on the clock” with these companies, you are paid on a job-by-job basis. Workers clocked in are paid hourly even if there’s nothing for them to do. No driver is getting hourly pay from Uber just for having the app open.

      1. John Brown (no body) Silver badge

        Re: No more double-dip?

        Yeah, it's called "piece work". There's also a thing called "casual labour". Been around for centuries but now someone invented a new marketing term and we call it the "gig economy", bringing back the 100 year old levels of employment and workers rights we've spent the last century getting rid of for better working conditions.

  10. eldakka Silver badge

    IANAL, but

    Uber, at least, has indicated it will fight the law in court if necessary.

    On what basis could they challenge the law in court?

    I mean, the definition of an employee vs contractor vs whatever else (casual and others) is all set via legislation. It is legislation that determines what type of worker that one is. All the courts did in the referred to California Supreme Court was decide whether the uber workers met the legislated definitions of contractor vs employee, they didn't set the definition, that is done via legislation.

    Therefore the legislature are free to change the definitions of what those work-type entail.

    The only possible path I can see - not having read the legislation - is if the legislature have abused their powers to create a law that specifically applies to one speciifc company, i.e. Uber.

    As far as I understand it, it is discriminatory (or whatever the term is) for a law to be passed that targets a specific person1, that is name a specific entity in the law.

    However, the same is not true for an industry. Laws can be passed that target specific industries - or even subdivisions of an industry, e.g. mining, farming (or dairy farming, cattle ranching, etc.).

    Therefore their threats to challenge the law in the courts I can't see as anything but bluster.

    -----------------------------------------

    1: Where a person is a legal entity, such as a natural person, Mike Lynch, or a legal person, the Uber corporation.

    1. diodesign (Written by Reg staff) Silver badge

      "On what basis could they challenge the law in court?"

      Uber claims it is not covered by the law. In its SEC paperwork, it describes drivers as customers: people using its app marketplace to sell rides to others.

      This is partly how it plans to challenge the law: insist its operation doesn't fall under the law, then fight to ensure it does not fall under the law.

      C.

      1. Anonymous Coward
        Anonymous Coward

        Re: Here, have it for free...

        Someone needs to come in and disrupt Uber. Sell an app, sell the maps, sell the server time/costs, and take zero of the commision.

        See how long Uber lasts then. :P

        1. John Brown (no body) Silver badge

          Re: Here, have it for free...

          "See how long Uber lasts then. :P"

          Uber is already running a huge loss, burning through VC at a rate of knots.

        2. ckm5

          Re: Here, have it for free...

          The issue is NOT the technology but the existing customer base. It's like Facebook, the value is in the 'social graph', e.g. all the known and identified users, not the actual technology platform.

          Replicating Uber AND getting the user base they have would likely cost much dollars.

      2. Roland6 Silver badge

        Re: "On what basis could they challenge the law in court?"

        This is partly how it plans to challenge the law: insist its operation doesn't fall under the law, then fight to ensure it does not fall under the law.

        So Uber isn't really challenging the law, it is simply challenging whether it applies to them...

    2. Anonymous Coward
      Anonymous Coward

      "IANAL, but"

      Perhaps we should look at how lawyers structure their revenue and compensation. Forget about the stereotypes of the poor independent contractor vs. the comfy salaried employee*. Look at how the most privileged class of workers choose to compensate themselves when they have the power to write the very laws affecting this issue.

      *That's all propaganda issued by regulators, tax authorities and unions. Democrats, who are still upset that Lincoln freed the slaves and can't stand to see people walking around free.

  11. Anonymous Coward
    Anonymous Coward

    40 years of "employee" status

    How lucky I am. I have just retired from full time work. Never, in 40 years did I ever have to question my employment status.

    I feel sorry for the kids of today.

    1. Nick Kew Silver badge

      Re: 40 years of "employee" status

      Well I'm ahead of you. Not far short of 40 years, covering periods of "permie" work, contract work, self-employed work and desperately-seeking work. But never a job with long-term security.

      The "gig economy" isn't new. Its real heyday was when the poor would go and queue each morning to get hired for the day. It shrank for a while, but never went away. Now it's grown a little more, back to something intermediate.

  12. Roml0k

    Bug bounty platforms

    > Bug bounty platforms also give clear criteria over the work product that they will pay for – which can be taken as directing work. And they pay people for their time and skills, as well as repeatedly refer to the “work” that the people that sign up to their platforms perform.

    From my understanding as someone who has used HackerOne to receive bug reports on behalf of a company, it's the company whose products are being tested that sets the critera over what work will be paid for, and which decides and makes the payments (bounties) to hackers. AFAICT the platform merely facilitates the communications and transactions.

    That said, HackerOne do offer paid managed accounts to companies, so it's possible this could affect their business relationship with those they contract directly to manage and triage those accounts, but they're not the ones doing the pen testing.

    1. Roland6 Silver badge

      Re: Bug bounty platforms

      Additionally, I question whether the bug bounty platforms require the same level of commitment to the platform as Uber et al expect from their drivers.

      I suspect the issue is that those running the bug bounty platforms have been looking at what Uber do with the intent of going the same way...

  13. jake Silver badge

    Has anybody asked the drivers?

    I know a double handful of folks who drive for uber and/or lyft on and off. Not a single one of them is happy with this legislation.

  14. Tom 35 Silver badge

    Coming soon

    Uber Workhouse

    No they are not inmates, they are independent contractors.

  15. skeptical i

    I guess it depends on how/why one is doing the gig work.

    If I have a "real" job, or if I'm a student, or if for whatever reason I have four hours free in the afternoon and a decent vehicle, why not earn some extra cash on the side. I hear that many drivers are in this situation and while the pay-per-hour is not particularly great, they value the flexibility (around other commitments) and this benefit makes the low pay worth it for them. So the current set-up is good for them, and I hear (from the librul meedja) that some are concerned that if they are categorized as employees then the ride hail companies might start dictating their hours instead of allowing them to "clock in" and out as convenient.

    But for those "forced" to drive because there are simply no other (licit) jobs around (or there are only shite human-robot burner jobs that cause more mental trauma and anxiety than the "security" of "regular" hours merits), what of them? Do they not deserve at least some minimal protections if they can commit to some minimum amount of work (hours a day, hours a week)?

    1. Charles 9 Silver badge

      Re: I guess it depends on how/why one is doing the gig work.

      The problem becomes similar to that of the Living Wage argument. How is it possible to separate those only doing it for extra cash versus people struggling to pay the bills without loopholes big enough for a big rig/lorry to drive through?

      And then there's the whole cost of labor argument which can leave employers on razor margins teetering on the edge and putting everyone under his/her employ at risk.

  16. This post has been deleted by its author

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