California Senate Leader: ‘Gig Economy’ Deal Likely Won’t Be Included In ‘Dynamex’ Bill Expected To Pass This Year

The leader of the California state Senate says negotiations over whether gig economy workers at companies like Lyft, Uber and Postmates should be classified as employees will likely continue into next year, and not be included in the legislation lawmakers are expected to pass by the time they adjourn next month.

“I have no doubt that we will discuss this into next year,” Senate President pro Tem Toni Atkins (D-San Diego) told CapRadio in an interview Wednesday, adding that she hopes “we will strike a balance” in the high-stakes debate that’s pitting business groups against labor unions. 

(See a transcript of the conversation below, and listen to the interview here:)

“We want to continue to make sure that those workers have the flexibility — but also have the ability to make a decent living,” the pro Tem said.

The business/labor dispute has dominated lawmakers’ time ever since the California Supreme Court ruled last year in the Dynamex case that gig economy contractors should instead be treated as employees. That would require companies to pay them minimum wage, offer benefits such as health insurance and provide workers’ compensation.

Although the ruling affects industries far beyond tech platforms, some companies — including Lyft, Uber and Postmates — are seeking a compromise with unions under which they would extend benefits to their workers while still classifying them as independent contractors.

Atkins was answering a question about the potential for such a compromise. She indicated that a bill which would codify the Supreme Court ruling into state law, AB 5 by Asm. Lorena Gonzalez Fletcher (D-San Diego), will move forward this year.

“I think at some point, we move forward and we take action on this piece of legislation,” Atkins said. “And there’s no doubt in my mind that we probably have more work to do going into next year, as we continue to have conversations throughout the state for various professions.”

But the pro Tem took great pains to point out that she wasn’t making any prediction, and that amid the “natural tension of having to bring things to conclusion” in the Legislature’s final days of session, “anything is possible.”

Her office later clarified that while she believes it’s “very, very challenging,” she is not ruling out the consideration of a compromise separate and apart from AB 5 before the end of session.

Gonzalez has so far negotiated exemptions in her measure for hairstylists, accountants and lawyers, among others. She’s expected to amend her bill with additional industry-specific rules before bringing it up for final votes next month, but she reiterated Wednesday that she has no intention of exempting gig economy workers.

“We are planning to go forward with AB 5 this year and have been very clear that gig workers have been misclassified and should be employees,” Gonzalez said in a statement.

Read Full Interview With Sen. Toni Atkins

Below is the full transcript of Atkins’ remarks on this issue in her CapRadio interview, lightly edited for clarity:

Atkins: (In) the final few weeks of session, anything is possible. That’s when it gets serious, real, and we come down to the wire. And there’s nothing like the last minute to try to really push those tensions to where they need to be to accomplish something meaningful.

I think the (California) Supreme Court action has put us in the position to try to figure out how we provide some clarity on the law and the ruling, so that people know where they stand. And I think getting into each of these types of professions and businesses has allowed us to see the complexity. And so I think, as we look at a gig economy, which provides some benefits to people who want to work in a different way, want to take advantage of innovation and just a change in how we work, we want to continue to make sure that those workers have the flexibility – but also have the ability to make a decent living. And that is about benefits, workers’ compensation and workers’ rights.

Where do you balance all of that, and how do you look at all of the industries? I have no doubt that we will discuss this into next year. I think there’s been a lot of work by a lot of stakeholders … (including) the business communities, the Chamber of Commerce, labor, in terms of trying to clarify where those lines are. And I think at some point, we move forward and we take action on this piece of legislation. And there’s no doubt in my mind that we probably have more work to do going into next year, as we continue to have conversations throughout the state for various professions.

I don’t think many of us understood how many professions would then come forward and say, ‘What about us?’ And I think we have to strike a balance. At the same time, trying to figure out how the technology, innovation of a gig economy that also gives alternatives to people for how they want to work. And those are important discussions. And I hope that we strike a balance. I think that is what the stakeholders are really trying to do….

What I would say is, I appreciate the tone and the tenor with which people have come to the table to try to hammer out some of these professions and tweeners. But the goal is clarity, but at the same time, following the ruling of the Supreme Court.

Q: So to be clear, you do not expect there to be a full compromise between the gig economy and the tech industry and labor unions in the next few weeks?

Atkins: Well, anything is possible. I’ve now been here 9 years. … As I said, there’s nothing like the last minute for things to materialize. Because that tension, that natural tension, of having to bring things to conclusion and closure really forces people to think differently. I’ve witnessed it 8 years, 9 years, and it still amazes me that that can happen.

Having said that, I’m not going to predict. I think it is counterproductive to try and predict what you think will happen, because it is so unpredictable. Having said that, this is a big enough issue that I know that regardless of where we end up on Friday (Sept.) 13th (the final day of session), it is a big enough conversation in this state that wherever we end up, it does not mean the conversation has ended. Because there will still be professions and outliers and people who want to come forward. And clearly, the transportation sector, as it relates to a number of those businesses, there are still conversations going on at the highest level. The governor is interested in all of these things. He’s very engaged – his staff, very engaged. So I have great promise that we will get something meaningful accomplished. But I also know that nothing is ever really done here.