AB5: Newsom signs bill rewriting California employment law – Los Angeles Times

California businesses will be limited in their use of independent contractors under a closely watched proposal signed into law by Gov. Gavin Newsom on Wednesday, a decision that is unlikely to quell a growing debate over the rules and nature of work in the 21st century economy.

Newsom signed Assembly Bill 5 in a private ceremony in his state Capitol office. Legislators gave final approval to the sweeping employment rules before adjourning for the year last week.

The new law “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits,” Newsom wrote in a signing message released by his office.

“As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow,” Assemblywoman Lorena Gonzalez (D-San Diego), the author of AB 5, said in a written statement.

The bill was one of the most hotly debated by the Legislature this year, legislation that began as a way to clarify state law following a 2018 ruling by the California Supreme Court that found a number of workers across the state should be considered employees of a business who are entitled to various benefits. During the legislative process, a variety of powerful business interests sought specific exclusions from AB 5, an effort to ensure those industries could continue to rely on non-employees in a variety of functions.

Those in the most prominent industry left out of those final changes to the bill, California’s app-based technology sector, insisted they would continue to seek exemptions from any new mandate to classify workers as employees. Three companies — Uber, Lyft and DoorDash — opened a campaign committee last month with a $90-million contribution toward taking the issue to California voters in a 2020 ballot measure.

Newsom pledged on Wednesday to continue the discussion with business groups worried about the new law, which takes effect next year. In particular, he cited the need to ensure workers in the new tech sector businesses can join labor unions.

“I will convene leaders from the Legislature, the labor movement and the business community to support innovation and a more inclusive economy,” he wrote in his signing message.

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