California’s regulatory agency have dealt ride-sharing firms Uber and Lyft a huge blow as they have confirmed that all drivers working on their platforms are employees under AB5, the state‘s new gig-work law.
Genevieve Shiroma, a commissioner with the California Public Utilities Commission, wrote in a report seen by TaxiPoint: “For now, TNC drivers are presumed to be employees and the commission must ensure that the TNCs comply those requirements that are applicable to the employees of an entity subject to the commissioner’s jurisdiction.”
AB5 was signed into law by Governor Newsom on 18 September 2019 and became effective on 1 January 2020.
AB5 modified the California Labour Code to direct that a person providing labour or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all the following conditions are satisfied:
The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
The person performs work that is outside the usual course of the hiring entity’s business; and
The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
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