California Assembly Approves Bill to Tighten Rules on Contractors

June 3, 2019

The California Assembly has voted to tighten the rules for labeling workers as independent contractors rather than employees.

The legislation passed last week could have big implications for how workers are treated in everything from trucking to the janitorial business and the gig economy.

Classifying workers as employees requires companies pay Medicare and Social Security taxes as well as overtime, unemployment insurance and other benefits.

Backed by labor unions, the bill includes exceptions for some industries.

But businesses, including Lyft, have raised concerns about the bill, arguing that hiring workers as independent contractors provides flexibility for companies and staff.

The measure, Assembly Bill 5, now goes to the state Senate.

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