Assembly Bill 5, known as the California Freelancer Law, goes into effect January 1, 2020. The law says that workers must be classified as employees instead of contractors, under certain conditions. Companies like Uber and Postmates are rushing to block the law.
As employees, drivers would be protected by minimum wage and overtime rules and would be eligible for workers’ compensation and unemployment insurance. The companies would have to pay half of their payroll taxes for Medicare and Social Security.
Postmates said it was seeking to delay the law from taking effect to gain time to figure out a compromise so that its workers would not be classified as full-time employees.
Drivers aren’t the only people affected. Freelance journalists in California are being laid off because the law says they can only maintain their status as independent contractors if they submit no more than 35 pieces per year.