Employee or Independent Contractor?

California’s crackdowns on the gig economy

From The Orange County Register, the Editorial Board published an editorial opposing California’s lawsuits against gig economy companies. They write:

California Labor Commissioner Lilia Garcia-Brower has filed her office’s first lawsuit against a company for allegedly violating labor laws by classifying its workers as independent contractors instead of employees.

Unlike independent contractors, employees in California are entitled to minimum wage, overtime, rest periods, reimbursement of business expenses, paid sick leave and various notifications, including specific information that must be printed correctly on pay stubs.

But companies in the gig economy have thrived by creating apps that allow willing buyers of services to find and pay willing providers of those services. That’s the business model of Uber, Lyft and the company that was just charged with violating state labor laws under Assembly Bill 5, the 2019 law that made it generally illegal for companies to hire independent contractors.

The labor commissioner chose a Bellflower company called MobileWash to be the first target of an AB5 enforcement lawsuit. MobileWash uses an app to offer car wash and detailing services. Customers order and pay for the services, including a tip, and workers use their own cars and supplies to go to the customer’s vehicle and provide the services that were ordered.

On what planet are these bureaucrats living?

MobileWash and companies like it are never going to operate like a factory, with employees clocking in and out during their breaks in a 10-hour workday. The concept offered by these companies is services on demand. If they’re required to keep a full-time workforce standing by across a wide region such as Southern California, there will be no MobileWash, and there will be no companies like it.

Who benefits from that?

Not customers, who will lose access to a convenient and affordable service. Not workers, who will lose the opportunity to pick up extra cash by working when and where they choose. Not investors, who will decline to provide the start-up funds for innovative companies that are certain to be hounded into bankruptcy by bureaucrats enforcing California’s senseless law against freelance work…

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