After many years of steamrolling workers’ rights, hoovering up venture capital and diligently avoiding taxes, the once invincible gig economy appears to have been dealt a fatal blow. The landmark California bill, known as AB5, will prevent many companies from treating employees as independent contractors, after overwhelmingly passing the senate and assembly earlier this month. Recently signed into law by the state’s governor, Gavin Newsom, the legislation will begin to take effect in 2020.
The bill lays out a clear standard that threatens a business model designed to misclassify employees as freelance contractors. Under the so called ‘ABC test’, workers are employees if (a) they perform their work under a company’s control, (b) their work is integral to the company’s business and (c) they do not routinely engage in an independent trade, occupation, or business of the same nature as the work performed for the hiring company.
