Efforts are underway to modify Assembly Bill 5, which passed in 2019 and changed the way companies treat independent contractors by requiring them to classify them as employees and provide certain benefits the gig-economy typically doesn’t receive.

The author of the bill has introduced proposed changes to the law in recent months to provide exemptions to several industries that were negatively impacted, and companies like Uber and Lyft are leading an initiative to have Californians vote in November on whether or not drivers should be exempt from the law.

Local legislators say while both options would benefit some, the best route forward would be a full repeal.

“I’m in favor of a full repeal of AB 5,” said Assemblyman James Gallagher. “I think it was an ill-advised policy to begin with.”

Gallagher co-authored Assembly Constitutional Amendment 19, which was submitted earlier this year and would essentially repeal AB 5 if approved. He said he’s heard of many different industries throughout the state being impacted by the change in law, the most notable locally being the trucking industry.

He said he is hopeful the amendment can receive the bipartisan support necessary to see the repeal over the finish line, though it will be an uphill climb to get there.

“Right now, even more so, people need some flexibility in the workplace, so this could end up being the impetus we need to push this forward,” Gallagher said. “I think if it goes on the ballot, it will pass.”

State Senator Jim Nielsen said the bill that ended up passing was rushed through last minute and has had a negative impact on businesses throughout California. He said more and more individuals are realizing the impacts by the day and hopes the state makes the needed changes, especially for small businesses and entrepreneurs who rely on independent contractors to carry out their jobs.

“I think the ultimate solution is to repeal the statute because it affects so many Californians,” he said. “I’m hopeful it will appear on the ballot for Californians to decide.”

If passed by two-thirds of the state Legislature, the amendment would be included on a future ballot for the public to vote on. ACA 19 was submitted in January 2020 and is pending referral to a committee for discussion.

“People who are operating as independent contractors, unfortunately, will have to pay attention to how they can find ways to operate under this new law. It’s tough and many people are finding that there isn’t a way to do so, which is why we need to change it,” Gallagher said. “Hopefully we will see some significant change and/or repeal of the law.”

 

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