Taken effect on January 1st, California’s Assembly Bill 5 (“AB-5”) has created a great deal of controversy. Supporters of the law praise it for its attack on inequality in the workplace, while gig-based companies, like Uber and Postmates, have filed complaints, alleging that it is unconstitutional. Signed into law in September 2019, the statute codifies the ruling of Dynamex Operations West Inc. v. Superior Court of Los Angeles, a decision by the California Supreme Court that restricts employers from labeling its workers as independent contractors. In Dynamex, the court created a new standard of presumption that all workers are employees, ensuring gig economy workers are entitled to benefits such as workers’ compensation and minimum wage. AB-5 places the burden on the employer to adhere to the newly adopted “ABC test” before a worker may be labeled as an independent contractor.
Win, Suzin, "The Bill That Disrupted the Gig Economy: AB-5 and Uber’s Troubling Response" (2020). GGU Law Review Blog. 71.