Sweeping bill on independent contractors passes California state Senate

SACRAMENTO —  With a deadline nearing, California state senators advanced sweeping legislation Tuesday night to limit the number of Californians classified as independent contractors. And after an intense lobbying campaign, lawmakers also made a last-minute deal that would ease the measure’s effects on the newspaper industry.

Senators approved Assembly Bill 5 29-11 after two hours of debate, which included GOP senators offering a dozen failed amendments that would have exempted some truck drivers, physical therapists and other workers. The measure still requires passage in the state Assembly before the end of the week when the Legislature adjourns for the year. Gov. Gavin Newsom has endorsed the bill.

“Today we are determining the future of the California economy,” state Sen. Maria Elena Durazo (D-Los Angeles) said. “We can either choose to become complicit in the exploitation of hard-working Californians or we choose to rebuild the working and middle class, protect taxpayers and help responsible businesses thrive in the state.”

AB 5 would remake California employment practices by aligning the law with a 2018 California Supreme Court ruling that significantly expanded the number of workers who must be provided benefits as business employees.

Opponents said the bill would harm the millions of Californians who work as independent contractors and have the ability to set their own schedules.

“This Legislature should not be in the business of picking favorites which is exactly what this legislation does,” said Senate GOP leader Shannon Grove of Bakersfield. “A one-sized-fits all employment test should not and cannot apply to these Californians who depend on their income from independent contract work.”

Since the bill’s author, Assemblywoman Lorena Gonzalez (D-San Diego), introduced the measure at the beginning of the year, a parade of interest groups have asked for special rules for their industries. Some succeeded: Insurance brokers and some who work in real estate professions, marketing and the arts would remain subject to the rules that existed before the 2018 court ruling.

Gonzalez has resisted a strong push from other businesses, most notably Uber, Lyft, Postmates, Doordash and other “gig” economy companies, who have warned the measure would upend practices for their drivers. The industry has pledged $90 million so far toward a potential 2020 statewide initiative to address their demands for worker flexibility.

Late Tuesday, separate legislation was introduced to allow a one-year delay for newspaper delivery drivers. The trade group representing California newspapers asked lawmakers to exclude delivery workers from being classified as employees, saying the move could further weaken the fiscal health of some publications. Management of the Los Angeles Times, as well as the paper’s editorial board, had supported that effort, and a full-page advertisement urging changes to the legislation was published in the newspaper on Tuesday.

Gonzalez said in a statement that she agreed to the changes “due to demands made in the Senate.”

“While I personally disagree with this delay, I’m willing to allow the newspaper industry the additional year to comply if it means those delivery drivers and nearly a million other misclassified workers are provided the minimum wage, benefits and workplace rights of Assembly Bill 5,” Gonzalez said.

That companion measure, Assembly Bill 170, also has to pass both houses of the Legislature by the Sept. 13 deadline.