California May Expand Employee Perks To Uber Drivers And Other Contract Workers California lawmakers are expected to approve a proposal to reclassify Uber drivers and other contract workers in the state as employees, giving them more rights and benefits at employers' expense.

Gig Work With Benefits: California May Expand Employee Perks To Contract Workers

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In California, the state Legislature is poised to vote on a proposed law that would give new benefits to hundreds of thousands of contract workers. It would do so by reclassifying them as employees. There's a lot at stake for companies and for a growing number of contract workers, as NPR's Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: For most of the last 4 1/2 years, Leonardo Diaz says he's made a decent living working 40 to 50 hours a week driving for Uber and Lyft.

LEONARDO DIAZ: I love interacting with people.

NOGUCHI: But Diaz has soured. He says both companies cut his share of payments. The Los Angeles father of four estimates his take-home amounts to only $9 an hour after paying maintenance and insurance. To cut costs, Diaz traded in his gas-powered Hyundai Elantra for a Kia hybrid.

DIAZ: I was getting less money, so I got to get efficient on gas.

NOGUCHI: More to the point, Diaz says he's tired of working as a contractor. He misses the employee health and paid leave benefits he used to receive when he worked as a valet.

DIAZ: We don't get any holidays pay, you know? When we are trying to get a vacation, nobody pays us vacations. If we get sick, nobody is going to pay for our doctors.

NOGUCHI: If it passes, the proposal would narrow the definition of independent contractor. That means many more people would be considered employees, a shift that triggers a host of other changes. Companies would have to pay for Social Security, for example, and workers' compensation and unemployment insurance.

Large employers would also have to pay for health insurance. Contractors make up a fast-growing part of the workforce, and any company in the state using them - think Amazon or FedEx - could be affected. It could also upend the business models of companies like Instacart or TaskRabbit that have made gig work readily available in recent years. And the impact of the new law would reverberate beyond California.

Monique Ngo-Bonnici is a lawyer who represents businesses.

MONIQUE NGO-BONNICI: Everyone is looking to California right now, and they're all following it with bated breath because they recognize that likely whatever happens in California is going to sweep across the country.

NOGUCHI: Last year, the state Supreme Court extended wage protections to more workers. This proposal would expand on that landmark ruling. Ngo-Bonnici warns the measure would force companies to put workers on shifts, taking away flexibility.

NGO-BONNICI: You've got to give them advance notice of their schedule. In certain municipalities, I mean, that has to be done weeks before.

NOGUCHI: Adrian Durbin, a spokesman for Lyft, says it would hurt drivers.

ADRIAN DURBIN: We would need far fewer drivers than we currently have because they'd be scheduled. We would know exactly how many drivers would be working.

NOGUCHI: Lyft and other companies lobbied for alternatives that would give workers some additional benefits without making them full-fledged employees. Those prospects dimmed after California Governor Gavin Newsom this week publicly endorsed the measure. But the companies haven't given up the fight. Uber, Lyft and DoorDash pledged to spend $30 million each on a ballot initiative that would give them exemptions.

Lorena Gonzalez, the San Diego lawmaker who sponsored the bill, doesn't think gig companies should be exempt.

LORENA GONZALEZ: What they'd like is to say, basically, if you're hired through an app that there's something different by that, and maybe some of the laws should apply, but a lot of the laws shouldn't. And I think that's ridiculous. It's dangerous to say if you're hired through an app, you're somehow different because pretty soon, we'll all be hired through an app.

NOGUCHI: She says, for too long, some companies skirted their financial and legal responsibilities by misclassifying their workers as independent contractors. Those who haven't been doing that, she says, support her proposal.

GONZALEZ: I think a company that's doing the right thing is, like, finally, I'm not going to be undercut by a company that cheats their workers.

NOGUCHI: California driver Leonardo Diaz says he's pinning a lot of hopes on the proposal's passage. He hopes it will lead to unionization, better pay and working conditions. If it passes, the law will take effect in January next year.

Yuki Noguchi, NPR News.

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