California passes bill to recognize contractors as employees

New York Times:

California legislators approved a landmark bill on Tuesday that requires companies like Uber and Lyft to treat contract workers as employees, a move that could reshape the gig economy and that adds fuel to a yearslong debate over whether the nature of work has become too insecure.


In California, the legislation will affect at least one million workers who have been on the receiving end of a decades-long trend of outsourcing and franchising work, making employer-worker relationships more arm’s-length. Many people have been pushed into contractor status with no access to basic protections like a minimum wage and unemployment insurance. Ride-hailing drivers, food-delivery couriers, janitors, nail salon workers, construction workers and franchise owners could now all be reclassified as employees.

This might seem like a yawn, but this could bring seismic change to tech. Companies that have pushed work out to contractors have avoided having to provide benefits, even with some contractors working full time.

Those same companies have avoided paying for unemployment insurance. And that last bit is perhaps the most complicated part of this puzzle, since the program is a unique marriage of both state and federal laws and feels certain to be challenged.

Pay attention to this one.