Legislature Will Not Act This Year To Modernize Labor Laws For 'Gig Economy' Companies

Businesses that rely on the “gig economy” have been urging state lawmakers to overturn a California Supreme Court ruling that limits them from classifying workers as independent contractors. But legislative leaders declared that effort dead on Wednesday.

In April, the Supreme Court unanimously ruled that a package and document delivery company called Dynamex had incorrectly classified its delivery drivers as independent contractors, instead of employees.

That’s crucial because companies must offer their workers benefits and follow labor laws. And it could upend the business models of companies like Uber and Lyft — as well as, opponents argue, the livelihoods of nearly two million Californians who work as independent contractors.

So those companies want the Legislature to suspend the ruling before adjourning for the year at the end of this month. They argue the state’s laws must adapt to keep up with the changing economy.

But in an interview with Capital Public Radio on Wednesday, Assembly Speaker Anthony Rendon (D-Paramount) said lawmakers will not act on the issue this year.

“Ultimately, this decision is about the future of the way work looks. And that requires us to be thoughtful and deliberate,“ Rendon said. “And there’s no way we can be thoughtful and deliberate in three weeks.”

Senate President pro Tem Toni Atkins (D-San Diego) concurred.

“The California Supreme Court voted unanimously for this new test,“ she said in a statement. “I agree with Speaker Rendon that forging any legislative review or response to their decision in just three weeks isn’t workable.”

Although the effort to suspend the ruling had strong support from business and industry groups, it was vehemently opposed by labor organizations.