California

Uber, Lyft couldn’t beat California employment rules, but these industries did

After millions of dollars in lobbying and countless hours of protests and negotiations, California lawmakers must make a final decision this week about the most high-profile labor bill of 2019.

Assembly Bill 5 would establish new rules that dramatically expand which workers are entitled to employment benefits and protections. Both employers and workers alike have battled for months over which industries will be exempted from the new rules.

On Friday, lawmakers submitted what the author’s office describes as the final round of amendments. Dozens of professions, from real estate agents to dog groomers, secured carve-outs that will let those workers continue to work as independent contractors.

Others including gig economy drivers and newspaper carriers weren’t given exemptions. That means they’ll likely be subject to the new rules under the bill, which codifies the 2018 California Supreme Court “Dynamex” decision that restricts when employers can classify workers as independent contractors and deny them benefits like overtime, sick leave and minimum wage.

Groups representing workers given exemptions spent at least $2.9 million lobbying in the first half of the year on AB 5 and other measures, according to lobbying reports filed with the state.

The California Medical Association, which represents doctors, dropped $1 million to influence lawmakers on hundreds of bills before the Legislature, including AB 5.

The focus of the group’s AB 5 lobbying was on securing an exemption for physicians, said spokesman Anthony York. Most doctors are exempt under the bill, but the association still wants amendments to specifically exclude those who practice in medical groups like Kaiser Permanente, York said.

Read Next

It’s not the only group still lobbying for more carve-outs, although bill author Assemblywoman Lorena Gonzalez doesn’t plan to amend the legislation further, said Gonzalez spokeswoman Sami Gallegos.

Ride-hailing companies Uber and Lyft have spent more than $750,000 combined on lobbying this year. They’ve also pledged to spend tens of millions of dollars taking the issue directly to voters if they can’t cut a deal with lawmakers that will free them from some of the new rules.

The California News Publishers Association is also pushing to secure an exemption for newspaper carriers. It spent $55,000 on lobbying this year.

In May, real estate agents were also added as an exemption following lobbying from the trade association that represents them.

“AB 5 has, from its inception, recognized that certain occupations should be excluded from the Dynamex test,” said Lotus Lou, a spokesperson for the California Association of Realtors. The association “supports AB 5, which recognizes that real estate brokerage activity is exempt from the Dynamex test.”

The realtors group spent nearly $750,000 lobbying in the first half of 2019.

Groups representing other exempted professions, including architects, veterinarians, lawyers, investigators, engineers and cosmetologists also reported lobbying on the bill.

Exemptions were chosen based on how much autonomy workers in those professions have, as well as how much they are paid, Gonzalez said during a July committee hearing.

“By and large, the exempted professions under this bill tend to operate with significant autonomy and bargaining power in the workplace,” the San Diego Democrat said. “In other words, most of these folks make over twice the minimum wage, which is our standard in existing law for any individual to be exempted from overtime and meal and rest period requirements.”

Some workers within the same industries are divided on the issue. Different factions of gig economy drivers have organized for and against an exemption in the bill.

Lawmakers face a Friday deadline to pass or reject legislation for the year. A rule requiring legislation to be in print for at least three days before lawmakers pass it means last-minute changes to any legislation must be finalized by Tuesday.

In a column published in the Sacramento Bee, Gov. Gavin Newsom said he would sign AB 5 if lawmakers pass it. He faces an Oct. 13 deadline to sign or veto legislation for the year.

Hannah Wiley of The Sacramento Bee Capitol Bureau contributed to this report.

Related stories from San Luis Obispo Tribune

Sophia Bollag covers California politics and government. Before joining The Bee, she reported in Sacramento for the Associated Press and the Los Angeles Times. She grew up in California and is a graduate of Northwestern University.
Support my work with a digital subscription
SUBSCRIBE TODAY
  Comments