California Gov. Gavin Newsom signed a sweeping new labor law Wednesday extending wage and benefit protections to about a million workers and aimed primarily at drivers contracted by ride-hailing companies such as Uber and Lyft.
Newsom had argued that when workers are misclassified as independent contractors rather than as employees, they lose basic benefits such as minimum wage, paid sick days, and health insurance.
“The hollowing out of our middle-class has been 40 years in the making, and the need to create lasting economic security for our workforce demands action,” Newsom said in his signing statement.
“Today, we are disrupting the status quo and taking a bold step forward to rebuild our middle class and reshape the future of workers as we know it,” Democratic Assemblywoman Lorena Gonzalez of San Diego, the author of AB5, said in a statement. “As one of the strongest economies in the world, California is now setting the global standard for worker protections for other states and countries to follow.”
Both labor groups and the ride-hailing companies, such as Uber, anticipate national implications from the signing of AB5.