California senators this week approved the AB5, bill that aims to regulate the activity of workers called gig economy. With the approval, transport platforms by application will have to register drivers as employees. But Uber already warned: it will not follow the new legislation, at least not immediately.
The newly approved law is effective as of January 1, 2020. At first glance, it determines that, when treated as employees, drivers of services like Uber and Lyft will have to receive a salary that is at least compatible with the minimum established by California, in addition to overtime and other benefits.
But Uber says it’s not like that. Tony West, the company’s legal director, explains that AB5 does not automatically classify application drivers as employees, but that it does a test of the company involved to determine whether the people it hires are self-employed or employees.
It is what the experts call the “ABC test”. The company must prove that: (A) it does not directly control the work of the contractor; (B) that the worker does not perform a function related to the main activities of the business; (C) that the worker carries out his occupation independently.
In other words, the company needs to make it clear that the worker is self-employed and carries out his activity on his own. Consequently, what Uber and other companies need to do is pass the test.
West stated that Uber is able to meet all criteria. On the other hand, the risk of the company not passing the test is great, mainly because the interpretation of point B is complex, after all, transporting people is a critical activity. Uber even argues that drivers are not essential to its business, but that is a difficult position to substantiate.
The subject is controversial even among drivers. On the one hand, there are those who want recognition of a link with the company so that remuneration and benefits start to meet minimum parameters.
On the other, there are those who fear that the classification as employees will force companies to adopt stricter restrictions, such as determining a maximum working time and prohibiting drivers from working on various platforms.
Before the AB5 approval, Uber proposed to California to establish a minimum wage of $ 21 per hour of travel, paid time off and compensation for work accidents, but was unsuccessful.
Because of this, the company joined Lyft and other companies in a campaign to pass specific transport application legislation in 2020 that is not as comprehensive as the AB5 project. Presumably, this is a soap opera that will still have many chapters.