California Governor Gavin Newsom signed a sweeping new law that could force gig companies like Uber Technologies and Lyft to reclassify their workers as employees.
The hotly contested legislation, Assembly Bill 5, dictates that workers can generally only be considered contractors if they are doing work that is outside the usual course of a company’s business. The law codifies a 2018 state supreme court ruling, and applies it to a wide range of state laws. It could upend the business models of companies that depend on armies of independent contractors, who aren’t guaranteed employment protections like minimum wage and overtime.
