California is in the final stretch of its bid to regulate the gig economy.
On Aug. 30, the state’s Senate Appropriations Committee cleared Assembly Bill 5, moving it a crucial step closer to becoming state law. It is now widely expected the bill, known as AB5, will pass a full Senate vote before the legislative session ends Sept. 13 and be signed by governor Gavin Newsom. The bill would likely force many gig companies to reclassify their independent contractors as employees, pulling the very foundation of the gig economy out from under it.
Newsom had kept his cards close to the vest on AB5, but on Sept. 2—Labor Day in the US—he publicly declared his support for the bill in an op-ed in the Sacramento Bee. “Reversing the trend of misclassification is a necessary and important step to improve the lives of working people,” Newsom wrote. “That’s why, this Labor Day, I am proud to be supporting Assembly Bill 5, which extends critical labor protections to more workers by curbing misclassification.”