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AB5 Needs Enforcement Now More than Ever

— April 5, 2020

It is imperative that California ensures prompt compliance with AB5 to protect our dedicated and vulnerable workforce. For each day that passes while nothing is done, our collective welfare declines.

Uber and Lyft drivers are pressing for enforcement of AB5, California’s so-called “Uber Bill” which went into effect on January 1, 2020. In fact, many are thumbing their nose at the current “shelter in place” order to protest outside of Uber’s headquarters on Market Street in San Francisco. Their request: benefits, including the minimum three days of paid sick leave, and disability and unemployment insurance, all as required under state law. The protestors are essentially calling upon the government to actually enforce AB5, which, among other things, requires many businesses, including rideshare companies, to reclassify their drivers from independent contractors to full-time W2 employees with benefits. When workers are classified as independent contractors, their employers are not required to provide them with certain minimum benefits and protections, including the minimum wage or unemployment insurance. Intentionally misclassifying workers is common practice for Uber, Lyft, Postmates, Doordash, and other similarly situated businesses, as they have come to rely upon this practice for a long time to skirt requisite payroll taxes and boost their profitability.

While rideshare demand has drastically curtailed since the onset of the novel coronavirus, many drivers simply cannot afford to stay home. They are, instead, risking their and their families’ health while continuing to provide services during the pandemic. The choice that these workers have been required to make is unfair, cruel, and illegal. It flat out violates AB5, which prohibits the classification of workers as independent contractors unless the services being provided are separate and distinct from the applicable company’s primary business. For instance, if a law firm engages the services of a painter to re-paint its offices’ walls, an independent contractor classification would be appropriate, as painting is clearly not within the law firm’s core business. Conversely, if a worker is providing driving services for a transportation company, an independent contractor classification would not be appropriate, as the individual is most definitely providing services that are within the company’s core business.

Empty city street; image by Alec Favale, via
Empty city street; image by Alec Favale, via

Rideshare companies, amongst other businesses, however, are ignoring the new statute, denying worker’s their rightful benefits, and endangering the health of our citizens in the process. Their specious argument is that they are “technology” companies, and driving is not core to their tech business. Since the passage of AB5, the companies have pooled a total of $110 million dollars to get a proposition on the ballot that would provide benefits to drivers without having to classify them as either employees or independent contractors. One such suggested benefit would be a meager $5.64/hour wage guarantee. Another is a limited healthcare stipend, available only to a select few. In response to this, RideShare Drivers United was organized by the same group of workers that pushed AB5 through in the first place. Their current requests include:

  • An expedited process for immediate access & pay out of unemployment insurance
  • Rapid prosecution of wage claims for unpaid wages and expenses on behalf of all misclassified workers
  • Immediate enforcement of paid sick leave requirements
  • A temporary basic income for all independent contractors and misclassified workers who have little to no work during this pandemic
  • The extension of paid sick leave to at least 4 weeks
  • A statewide eviction moratorium until the end of the crisis
  • Immediately withdraw the ballot initiative to create a gig worker carveout to AB5
  • Reallocate the $110 million dollars for the AB5 referendum to create an emergency driver relief fund
  • Cease all appeals for driver unemployment insurance claims
  • Follow all California employment laws now
  • Quickly process and pay wages of workers who have filed with the Labor Commissioner

In the meantime, many workers are forced to continue rendering services without the legal protections that AB5 intended to offer. And, with COVID-19 now depressing rideshare demand by over 90%, most drivers are failing to make enough money to support themselves and their families. Car, housing, and insurance payments will be missed by many, and our society and economy will suffer greatly. The very individuals providing essential services during our time of need are being neglected in favor of profit and wealth. It is imperative that California ensures prompt compliance with AB5 to protect our dedicated and vulnerable workforce. For each day that passes while nothing is done, our collective welfare declines.

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