California Passes Landmark Law Protecting Employee Rights of Uber Drivers, Gig Workers, Others

Following is a statement by Rebecca Smith, director of the Work Structures program at the National Employment Law Project:

“The passage of AB5 in California is a resounding victory for workers and responsible businesses in that state and across the nation. California is paving the way for other states to ensure that workers are not carved out of the employee rights and benefits that they need and deserve. Against a no-holds-barred, money-is-no-object campaign, workers showed big tech that even in its birthplace, it can’t run over workers in its quest for profit.

“AB5 uses the clear and fair ‘ABC test’ to determine when a company must be accountable to workers as its employees. It will lift up the wages and benefits of janitors, nail salon workers, construction workers, landscapers, nannies, homecare workers, ride-hail and truck drivers, delivery workers, and many others.

“Today, we celebrate the passage of AB5 and honor the workers, advocates, and legislators who stood up to big business. Tomorrow, we roll up our sleeves. We must work together to enforce both new and existing laws, raising wages and ensuring that workers’ compensation, safe workplaces, paid sick days and paid leave, and protections against discrimination and harassment are available to all workers.

“Critically, we must deliver collective bargaining to all workers to make sure they can negotiate with the boss for higher standards, and the way is open for innovative new strategies to do just that. Working with allies, we can reverse yawning inequality, dismantle a legacy of structural racism that pervades the labor market, and build an economy that works for all of us.

“Next up: New York State, where NELP has joined a coalition of labor and community organizations working to pass a similar ‘ABC test’ bill. Our fight is just beginning, but California shows that when workers organize, they can win even against tech behemoths.”

Background on ABC Test

The ‘ABC test’ is commonly used by courts and government agencies around the country to determine employee status. In addition to California, three states currently use an ABC test to determine employment relationships for all wage and hour laws: Massachusetts, New Jersey, and Vermont. Nine more states use the test for some sectors (typically construction), and more than half the states use the test in their unemployment insurance laws.

Under the ABC test, businesses that seek to treat workers as independent contractors must show that the workers: (A) are free from control and direction by the hiring company; (B) perform work outside the usual course of business of the hiring entity; and (C) are independently established in that trade, occupation, or business.

A true independent contractor is someone who runs her own separate business, sets her own rates, builds a customer base, and takes on the risk of business failure. The vast majority of workers in our country are not running their own businesses. They are employees, often of powerful corporations.

Here’s the difference between the rights of an employee and those of a contract “gig” worker:

  • An employee who is injured on the job has the right to workers’ compensation; a non-employee is on her own
  • An employer pays into Social Security, contributing to an employee’s secure retirement; 1099 workers finance their own retirement.
  • An employee who is subject to sexual harassment on the job is protected by federal laws against discrimination; a contractor is not.
  • In some states, an employee who gets sick or has a baby has paid leave for the time she needs to take off from work; a non-employee can only take a day off if she is willing to take a pay hit.



The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit Follow NELP on Twitter at @NelpNews.

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About the Author

Rebecca Smith

Director of Work Structures, National Employment Law Project

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