Uber and Lyft even though competitors have joined as a force in a unique event to stop the California legislature bill from coming into effect as it would make it difficult for the companies to bifurcate workers as sovereign contractors in their home state. The new bill will have the previous year’s Dynamex decision coded by the Supreme Court of the state that had passed California’s Assembly (51-11) in the former month and is almost ready to be handed over to the Senate. The companies will have a new standard set up such that the service providers will be paid as contractors instead of employees, which is the trend that the ride-hailing services’ businesses have been built upon.
The 2005 lawsuit had given rise to the Dynamex decision that been put up against a courier and delivery company, Dynamex, that had started to categorize them as independent contractors in 2004. The California Supreme Court’s current decision has a new method for classifying the driver as a worker which is known as ABC test under which all the 3 norms need to be fulfilled to be designated as an independent contractor. The 3 norms include the company would not have over control the work routine, outside company businesses, and consider the worker as in for self- business. California will have its Senate pass the AB5 that will not imply the Dynamex’s strict rules into the state’s laws and instead think beyond wages and other projections or benefits.
Uber and Lyft have their seniors discussing the profits of flexibility as independent contractors as a tough decision for their drivers. The drivers will have access to benefits such as education reimbursement, paid time off, and retirement planning and also have an organization that will speak on their behalf regarding wages. The new workplace arrangements will have the concept of the portable benefits included in it. According to Lorena Gonzalez, an AB5 sponsor Assemblywoman, the companies had earlier decided to give 2.5% of payments into a fund to cover benefits, which is highly below compared to 6.2% of salaries given into the Social Security itself. The Assembly Republicans have planned to sponsor another competing bill, AB71 that will retain the Dynamex provisions. The Assembly committee is still reviewing it. The current economy is completing changing America’s workforce.
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