Uber, Postmates Dealt Blow as California Judge Denies AB 5 Injunction
Arthur T Knackerbracket has found the following story:
Uber and Postmates won't be getting the reprieve they were hoping for from a new California gig worker law. A federal judge denied their request to put a temporary stop to AB 5 while a lawsuit they filed against the state works its way through the courts. This means both companies are still beholden to the law, which could force them to reclassify their drivers as employees.
"The court does not doubt the sincerity of these individuals' views, but it cannot second guess the legislature's choice to enact a law that seeks to uplift the conditions of the majority of nonexempt low income workers," US District Judge Dolly M. Gee wrote in a 24-page ruling on Monday. "The balance of equities and the public interest weigh in favor of permitting the state to enforce this legislation."
AB 5 boils down to worker classification. Currently, most workers for gig economy companies, like Uber, Lyft, Postmates and DoorDash, are classified as independent contractors. While that classification can mean increased flexibility for workers, it can also mean those drivers are shouldering many of the costs of their employers. Uber drivers, for example, pay for their own car, phone, gas and vehicle maintenance. They also don't get basic benefits, such as minimum wage guarantees, overtime pay and health insurance.
Under AB 5, which went into effect on Jan. 1, all companies using independent contractors in California will be put to a three-part test to determine whether they must reclassify their workers. If they don't pass that test, they'll have to turn their workers into employees.
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