Industries Grappling To Comply With California Law That Protects Contract Workers

California's new law, AB5, aiming to reclassify some contract workers as employees, goes into effect on Wednesday. Industries are working to figure out how to comply, or work around the law.

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More protection for contract workers, that is the goal of a new law that goes into effect today in California. The law aims to reclassify many of them as employees, meaning companies would have to offer them benefits and worker protections. Gig companies such as Uber and Lyft are trying to find ways around it, and industries from trucking to newspapers are grappling with how to comply.

Here's Scott Rodd from Capital Public Radio in Sacramento.

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SCOTT RODD, BYLINE: Uber and Lyft drivers line up in a parking lot near Sacramento International Airport, waiting for a ping from riders at the terminal. Alfonzo Martinez (ph) says driving for gig companies allows him to balance the demands of being a father to school-age children with special needs.

ALFONZO MARTINEZ: With this job, I have the freedom to work when I have time, when the kids are in school. And it gives you the flexibility to work your own hours.

RODD: A few drivers I spoke to say they'd like access to benefits, but most say they fear California's new law will mean losing the flexibility of being a contractor.

MARTINEZ: All I want to do is be able to come and go as I please.

RODD: And for the foreseeable future, Martinez can. Ride-hailing companies argue making drivers employees would eliminate opportunities for them while hiking up prices for riders. Uber and Lyft declined an interview for this story, but they've developed a multipronged strategy to avoid the new law. They're negotiating with lawmakers and labor unions to create an alternate class of worker, basically a contractor with added benefits. There's also a lawsuit filed in federal court challenging the law. And gig companies have sunk over a hundred million dollars into a ballot measure to exempt them from the requirement.

But Democratic Assemblywoman Lorena Gonzalez, who authored the legislation, says the companies are putting profits over workers. Here she is speaking on the California Assembly floor in April, shortly after Lyft went public.

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LORENA GONZALEZ: The same week that workers had to go on strike because their per-mileage fee was being cut, an investor was celebrating his $30,000 investment that became $120 million in one day.

RODD: When I called her recently, she said she hoped city attorneys and the state attorney general hold gig companies accountable.

GONZALEZ: This is an ongoing battle, trying to get companies to abide by, you know, regular labor laws.

RODD: As tech businesses valued at tens of billions of dollars attempt to wiggle out of the new requirement, smaller industries are scrambling to figure out how to comply.

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RODD: Freelance writers Bradley Geiser and Will Griffith are sipping beers at a crowded bar while watching the Sacramento Kings face off against the Phoenix Suns. Griffith says Sacramento's professional basketball team hasn't found its groove this season.

WILL GRIFFITH: There's some whiplash there, where they were second in the league in pace last year, where they were running and gunning up and down the floor, to now, they're 30th in pace. They're the slowest team in the NBA.

RODD: The two writers have contributed insights like this to the sports website SB Nation for the last five years. But in December, the company announced it would terminate contracts with hundreds of freelancers in light of California's new labor law. Geiser says contributing to the Sacramento Kings blog, Sactown Royalty, isn't just about making some money on the side. It's also allowed him to raise his profile as a sportswriter.

BRADLEY GEISER: Writing for Sactown Royalty lets me just embrace something I'm passionate about while covering issues big and small.

RODD: Vox Media, which owns SB Nation, did not respond to a request for comment. The company has said it plans to replace the freelancers with a staff of full-time employees. There are currently six openings posted for California-based positions.

The new law does provide a specific carve out for freelancers. They can contribute up to 35 submissions per year to a single outlet and still be considered contractors. But a lawsuit filed in federal court by journalism and photography associations argues the law violates the First Amendment.

While the two Sacramento-based writers aren't involved in the lawsuit, Griffith says he supports it.

GRIFFITH: If you can't hold Uber and Lyft to - if you can't hold their feet to the flames and it's affecting other people who it really wasn't supposed to affect, something needs to be changed and quick.

RODD: Gonzalez, who authored the measure, says she expects California's legislature will continue to fine-tune the law in the months and years to come. For NPR News, I'm Scott Rodd in Sacramento.

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