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What happened with gig workers and the new employee classification law?

| Nov 26, 2020 | Business Litigation

California passed a controversial new law that changed the worker classifications. The changes made it much more difficult for many companies to classify workers as independent contractors due to a provision that said independent contractors cannot do work that is part of a company’s main business.

Recently, though, voters passed a new law that will help companies retain independent contractors, according to The New York Times.

Gig workers

Those hurt most by the change in the independent contractor definition were gig workers, such as Uber drivers. These workers handle the main business of a company but have much more freedom than an employee would have to decide when they will work.

Many companies stopped hiring workers because they could not foresee a way to classify them as employees and keep operating under current business models. These workers generally work when want, making their own schedule. The company acts more like a middle man, helping the public get services from the gig workers.

The new law

The new law will require some compromise on the part of companies. They will have to provide some benefits to workers. It also requires a minimum wage. The law specifically exempts gig workers.

Without the change in the law, the future of gig work in California was in jeopardy. The business models did not work with employees. Plus, the costs to maintain such a company would not have been profitable. With the new law in place, it helps these companies to continue operations and protects the many jobs available to gig workers throughout the state.