Lorena Gonzalez Proposes Changes To California’s New Gig Economy Law

Speaker 1: 00:00 80th district assembly woman Lorena Gonzalez has proposed and supported a number of high profile bills during her time in Sacramento, but none of that legislation has generated a greater amount of backlash than her assembly bill five AB five the new law that went into effect this year. Reclassifies many freelance and gig economy workers as employees and titled to minimum wage workers' comp and paid sick leave. A San Diego court recently heard the first case to dispute the new worker classification law in it. The gig shopping app, Instacart lost, but the judge said the new law needs clarification quickly. And joining me is assembly woman Lorena Gonzales. Welcome to the program. Thanks for having me. First of all, what did you think about this ruling in the Instacart case last week? The judge did not order the company to stop operations even after losing the case. Yes. Well, it wasn't a direct case. Speaker 1: 00:57 What it was was our city attorney, Mark Elliott, was using a provision of the law that allowed for a large, uh, city city attorney to file an injunction against these companies who are not yet abiding by the law. And she filed the injunction and the judge said she is likely basically to win that suit, that they are likely misclassifying their workers. He basically put it, stayed the decision until it gets appealed because it is the first decision of its kind. And so I think he wanted, um, to, to ensure that there was, um, that there was going to be an appeal, that the appeal took place, that this was going to move forward. Um, you know, you're asking a company, a group of companies to do something, uh, that they don't want to do, which, which takes a lot. But the judge has also pointed out that this isn't a new idea for Instacart and these gig companies, they've been on notice since a court case called Dynamex that was passed in AR that was decided in April of 2018 and it was a case that was decided by a bipartisan unanimous Supreme court in California that said, our, our laws just don't make a lot of sense and we need to be very clear about classifying workers who do the work of a company as employees. Speaker 1: 02:14 And they set out the parameters. Um, and this has been since April of 2018 that we've been on notice and all of California that the laws were changing. AB five just simply codified that and provided provisions for enforcement. So the amount of pushback you've gotten on AB five has not surprised you? Not really. I mean, when you're trying to do that big of a labor reform bill, we knew that we had to take this court case that we had to provide clarity and some exceptions to it because the Supreme court just said this applies to everybody. You are a, a, an employee of an organization if you're doing the work of that organization. And we know historically in California there are some, uh, real estate agents for example, who were amended out of that because they always have been. So we tried to go through the labor code as much as possible, provide clarification and amendments, taking the court case into consideration as we were doing that. Speaker 1: 03:09 And we said when we passed it, we know there's still going to be questions and, and loose ends. So we're back at the table now and we're trying to ensure that as we do this type of really big labor law reform that we get it right. Freelance journalists also had a big problem with AB five. Are there any other criticisms or, or types of employment that you see as legitimate criticism of AB five? I think the musicians have the biggest criticism and I think it's correct. We're going to release some language in the next few days here to try to after months if not a year long discussion between the recording industry unions that represent musicians, uh, independent artists, uh, trying to get them all on the same page. It's been quite a struggle. I think they have legitimate concerns if you're five people who just come together to play in a band every two weeks and nobody's really the employer. Speaker 1: 04:01 How do you deal with a situation like that? And that's what we're trying to get at. We've uh, extended some provisions for freelance writers and we're going to pass those through hopefully this year as well or quickly, um, to provide some relief on that and photographers as well. So there are some freelance positions that we know, um ha it has to be cleaned up. And then there are people complaining who quite frankly have, uh, been breaking the law for a long time, even before it'd be five there. And before the Dynamex decision, there were rules about who could be an independent contractor. There are rules about how much control a company would have over somebody who says they're a freelancer and I'm the EDD for years have have found, you know, thousands of people out of compliance. And so there are people right now who are complaining and the fact is they've just established a business model that was illegal in the first place. Speaker 1: 04:47 So that's tough. And I understand if it's your business, that's a real tough conversation to have. But, but that's why we had to tackle this. And who are the companies that, whose complaints on this you don't see as valid? You know, they, they range from just about anything I've heard from caters who don't think that their servers should have to be employees. And it's so clear to me, and I think other people who are in that industry, that if you're a server or bartender, you're an employee of the person you're working for. Um, there are people who are operating home healthcare services and have just contracted with a bunch of independent contractors to go into people's homes, um, sometimes for for 12, 24 hours, not getting overtime, not getting minimum wage. That's been a violation for years. And, and so when somebody comes and says, well, I'm going to lose my business because I'm doing it this way, it's really hard to have that discussion and say, you've been operating outside the confines of the law and you've been misclassifying your workers for a long time. Speaker 1: 05:41 But we're not gonna, we're not gonna excuse that because we're trying to clean up, um, the law in general. So you are going to be introducing a package of reforms to AB five this session I have, I've re, I've actually introduced, um, AB 1850. That's where we put the, the language about freelancers and photographers and to clean that up and, uh, we should be releasing some language. I think tomorrow, Wednesday, um, on journalists, I mean I'm musicians and when we release that language on musicians, if we can get consensus and two thirds consensus, we're going to put an urgency on it so that we can get it through for free for the fixes that we have so far. There's also been a move to get a voter initiative on the November ballot to overturn a B five. Do you sense the backlash to this new law is strong enough to do that? Speaker 1: 06:30 Well, I want to be really clear. The vote or the initiative has been, um, funded by Uber and Lyft and it's not to overturn AB five. It's to exempt them out of it. So it would exempt all of Uber Lyft door dash, Postmates, and basically say they don't have to pay minimum wage. They don't have to pay over time. They don't have to pay worker's comp. They're basically saying, if I hire my worker through an app, then they don't have to provide any of these protections. One of the things that concerns us most is w when a company does this, they don't pay into workers social security. I mean, we're talking about basic labor laws. I just want to ask you one more question, and that is Republicans in California reportedly see opposition to AB five as a golden opportunity to rally support among employers and workers who are afraid of losing their gig economy jobs altogether. Speaker 1: 07:16 If their companies go out of business, how do you respond to that? You know, I think Republicans always tried to create a divide on, on an issue, but the bottom line is, of course, they're against AB five they've been against minimum wage and overtime rules. They've been against having workers' compensation. They wanna destroy social security. They don't want it to be funded. So it's not surprising to me that the Republican party has, has taken employment law as a way to try to create a divide, but every worker deserves those very basic things. I've been speaking with assemblywoman Lorena Gonzalez. Thank you so much. Thank you.