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State bill may impact independent contractors

Posted at 6:38 PM, May 30, 2019
and last updated 2019-05-30 21:46:56-04

What makes an employee? That’s the question state legislators will have to grapple with after a new bill passed the state assembly this week.

It would redefine the differences between independent contractors and regular employees.

David Domingues became a full-time Lyft and Uber driver after growing frustrations with his previous job.

“When I see my ratings as high as they are then I know that I’m treating my customers right and I’m doing a good job unlike what my boss used to tell me – that I was not doing a good job and I wasn’t doing the right thing,” Domingues said.

Now under a new state bill AB-5 and a California Supreme Court decision referred to as Dynamex, Uber and Lyft drivers like Domingues and other independent contractors like consultants, travel agents, freelance writers and graphic designers could be considered employees – while workers like doctors, attorneys, real estate agents and hairdressers would be exempt from the law and remain independent.

State Assemblywoman Lorena Gonzalez says her bill would help more California workers receive benefits.

“Minimum wage, overtime, workers compensation, unemployment, insurance, for drivers even mileage and even gas money – that’s all included when you work for a company. Just because something comes through an app and that’s the determinate of where you’re going on your job doesn’t mean they should be free of these requirements,” Gonzalez explained.

Domingues says he wants to be able to keep his freedom to make his own schedule but would appreciate having health benefits. “I’m an older guy so I tend to need to see the doctor a little more than most so it would be nice to have benefits to be able to see a doctor and have dental,” he explained.

Some local businesses have trouble seeing the silver lining.

“We see AB-5 as a job killer – pure and simple,” said Joe Armendariz, Director of Business Development for Armendariz Partners.

Armendariz consults for Montecito Village Travel, a travel agency that has more than 500 independent contractors. He thinks travel agents could be one of the industries hit the hardest, as smaller businesses would lose opportunities to be competitive.

“Being an independent contractor brings with it significant tax advantages which means less revenue for the state and government. So this is really nothing more than an attempt to raise taxes on small businesses,” Armendariz said.

Assemblywoman Gonzalez says she hopes to work together with more industries to perfect her bill before it reaches the governor’s desk.

In a statement, Lyft tells KSBY it strongly opposes the bill saying:

“Lyft drivers overwhelmingly prefer the freedom of working where, when, and how much they want.  Many are moms, students, seniors or veterans and 75% of them drive less than 10 hours a week. Lyft strongly opposes AB 5 which would force ridesharing drivers into shift work, eliminating the control drivers currently have over their own schedules.”