Employee or Independent Contractor?

Gig economy bills move forward in other blue states, after California clears the way 

From The Washington Post, Eli Rosenberg discusses legislative efforts in other states to adopt measures to protect freelancers and other workers who might be misclassified as independent contractors similar to California’s AB5. Elie writes: 

Legislators in three other states with Democratic majorities, New York, New Jersey and Illinois, are considering similar bills that could open the door for a wide range of freelance workers. The bills would benefit not just app gig workers but janitors, construction workers, truckers and educational workers.

In New York, two efforts are underway. One would emulate California’s law by creating a strict “ABC” test, which would define workers as employees unless they are A) free from the control and direction of the company; B) engage in work outside the company’s main business; and C) already work independently from the company, doing the same kinds of thing as the company.

The other bill is similar to proposals made by Uber and Lyft in California: to create a third category called a “dependent worker” who would be neither employee nor contractor but could, at the discretion of state regulators, be granted some similar rights.

“We don’t want to see a regression in worker wages and benefits over time as the gig economy continues to expand and grow,” said Sen. Jessica Ramos, chairwoman of the New York Senate’s Labor Committee, where the bills will be considered. “I would just say that all of these app companies, especially, should come to terms with and be aware that we are looking to hold them accountable as employers.”

Ramos said she hopes one of the bills passes her committee by the end of the legislative session in June.

New Jersey has had an ABC test for workers on the books since the 1930s, but it’s just a rule, not a law. Democratic lawmakers say that codifying it into law will make it harder for future administrations to undo while increasing the pressure to enforce it. State Senate President Steve Sweeney, a Democrat, said through a spokesman that he hopes the statehouse will pass the bill by the end of the year.

That proposal comes on the heels of a report by Gov. Phil Murphy’s office that examined the issue of misclassification, noting its prevalence in labor-intensive but low-wage sectors such as construction, home care, transportation, trucking and delivery services. It cited studies estimating that as many as a third of employers misclassify at least one employee as a contractor and estimated that New Jersey loses tens of millions of dollars every year in unemployment and disability contributions as well as income taxes.

In Illinois, legislative efforts are in the beginning stages. Will Guzzardi, a Democratic representative in that state’s legislature, said he plans to introduce similar legislation this year after consulting with labor advocates and workers. He said he did not yet know whether the bill would seek to create a new class of worker or tighten restrictions on contractors as California does.

Back to Top