A year later, app-based gig workers in California were excluded from the law via Proposition 22, which itself was deemed unconstitutional in the state in 2021. In California, an effort to secure benefits for gig workers - AB-5 - passed in 2019. include a recently rejected ballot measure in Massachusetts, which could have explicitly defined such workers as independent contractors. Ride-hail and meal-delivery companies say that changing how gig workers are classified would threaten their businesses, yet these firms - Uber, Lyft and DoorDash - have also posted hefty net losses under the status quo.Īttempts to alter gig worker classification in the U.S. Despite pressure from labor organizers and some lawmakers, some tech firms have fought to continue classifying their workers as independent contractors, arguing the status benefits their businesses, other local businesses and workers themselves. Uber, Lyft and DoorDash depend extensively upon gig workers, who haul people and meals around on their behalf but do not receive many hard-won benefits of employment - such as employer contributions toward their Social Security and Medicare taxes. However, the scope of the proposal itself would be limited to areas such as minimum wage enforcement. The rule could make it easier for contractors to gain full employment status if they are “economically dependent” on a company. Soon after, Uber’s share price dropped by more than 10% to $24.61, while Lyft’s tanked more than 12% to $11.22 and DoorDash’s fell more than 5% to $44.98 at the time of writing. The prospective guidance is intended to “combat employee misclassification,” the federal agency said in a statement. The stock prices of Uber, Lyft and DoorDash slid on Tuesday after the Department of Labor announced proposed changes to how workers should be classified.
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