A U.S. appeals court struck down a bid by Uber and its subsidiary, Postmates, on Monday that tried to reignite a challenge to a California law that could force certain companies to treat gig workers as employees rather than independent contractors.
The 9th Circuit Court of Appeals upheld the lower court ruling, saying that the plaintiffs have failed to show that the law, known as AB 5, unfairly singled out app-based transportation companies.
“There are plausible reasons for treating transportation and delivery-referral companies differently from other types of referral companies, particularly where the legislature perceived transportation and delivery companies as the most significant perpetrators of the problem it sought to address—worker misclassification,” Circuit Judge Jacqueline Nguyen wrote in the opinion.
A spokesperson for Uber didn’t immediately respond to Fast Company‘s request for comment.
The difference between being classified as a gig worker and an employee is crucial and hotly contested in the industry. Employees are entitled to minimum wage, overtime pay, reimbursements for expenses, and certain other protections that aren’t extended to independent contractors. That means hiring independent contractors, rather than employees, can be better for gig companies’ bottom lines. Several studies have found that contractors can cost companies up to 30% less.
AB 5, which went into effect in 2020, makes it more difficult for companies to classify their workers as independent contractors.
Login to add comment
Other posts in this group
Privacy legislation is the white whale of American politics, at once obsessively sought after, and frustratingly out of reach. A bipartisan, bicameral bill called the American Privacy Rights Act,
Matt Higgins was at ground zero within hours of the September 11
Globally, one in three women—or 736 million people—have experienced violenc
Seven content-licensing sellers of music, image, video, and other datasets for use in training artificial intelligence systems have formed the sector’s first trade group, they said on Wednes
Amid climate change and rising waters, Floodbase is seeking to use space data to streamline the flood insurance process, reducing the load for insurers and getting money into people’s hands for da
