California Poised to Make All Transport Drivers Employees (TNC, Taxi, Bus, NEMT & Limo) – and New York May Soon Follow!
Matthew Daus was quoted in an article published by the Daily News entitled "New York City Regulated Uber and Lyft, Now Other Cities Are Looking To Do The Same."
On Tuesday, the California legislature passed a bill that would make it more difficult for businesses operating in the state to classify workers as independent contractors. California Governor Gavin Newson is expected to sign Assembly Bill 5 (AB5) into law, potentially granting employee status to millions of workers, including Uber and Lyft drivers, beginning January 1, 2020.
AB5 codifies a California Supreme Court’s decision in Dynamex v. Superior Court of Los Angeles that established a three-part test, known as the “ABC” test, to establish that a worker is an independent contractor. The new law creates a presumption that a worker who performs services for a business is an employee for purposes of wage and benefits claims unless the hiring entity demonstrates: (A) the worker is free from the employer’s control and direction; (B) the worker performs work that is outside the usual course of the employer’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature.
The law will apply to all independent contractor workers, not just drivers working for Uber and Lyft. Taxi, limousine, non-emergency medical transport business could all be faced with reclassifying their drivers as employees. AB5 is considered one of the biggest threats to the independent contractor business model because it would give drivers basic workplace rights and protections, including a minimum wage, workers’ compensation, unemployment insurance, paid sick leave, and paid family leave.
After AB5 was passed, New York Governor Andrew Cuomo announced that he, too, wants more workers in his state to be classified as employees, not independent contractors.
Matt, a former head of the New York Taxi and Limousine Commission, said the push to regulate Uber and Lyft in New York and California could inspire other cities to fight back as well. “The political tide is shifting,” said Daus. “It’s now time for a backlash. The question is will the drivers outside of the coasts get organized? Will this be a one-off thing that fizzles out, or will it snowball into something much bigger?”