California lawmakers approved a heavily debated bill that could reclassify some on-demand contractors as employees. The law will take effect in January but the companies that will be impacted the most—Uber, Lyft, DoorDash, and Instacart—say they’ll continue to fight it.
The California State Senate approved Assembly Bill 5, with a vote of 29-11, late Tuesday. On Wednesday, the state assembly also signed off on it, leaving the final approval to Governor Gavin Newsom, who has already expressed support for the bill.
At stake: Companies may have to reclassify some of the hundreds of thousands of on-demand workers from self-employed contractor to employee with benefits. The change could include Uber Eats and DoorDash food delivery people to Lyft drivers to Instacart personal shoppers. The companies would have to provide often-pricey health benefits and pay a portion of taxes for each employee. This comes at a time when Uber and Lyft, both of which went public earlier this year, are struggling to cut massive losses and prove they have a path to profitability.
Source:: Fortune.com – Tech