When California lawmakers passed the AB5 law last year, they took strides to protect gig workers from unscrupulous employers. The AB5 law prohibits companies from classifying gig workers as contractors instead of employees. In the past, employers have avoided paying minimum wages, certain taxes and benefits to gig workers because they were not considered employees. Beginning this past January, this loophole was closed, but business disputes over employee classification continue.
Not every employer has complied with the new law. In fact, DoorDash is now facing a lawsuit for continuing to classify its workers as contractors, not employees. DoorDash is fighting the lawsuit, claiming that its ability to hire gig workers as contractors allows them to provide an essential service to the public and help businesses remain viable while offering a source of extra income to those who desperately need it in this tough economy.
DoorDash, along with Postmates, delivers food from local restaurants that do not offer their own delivery services. Instacart is another service that uses gig workers to deliver groceries. DoorDash, Uber and other companies that rely on gig workers continue to argue that AB5 is unconstitutional. Several companies have their own lawsuits pending. Nevertheless, employees of these companies are seeking millions in back wages since the companies continue to classify workers as contractors even after the passage of AB5.
Business disputes can be complex and challenging, especially when they involve newly passed legislation. Often it is a lawsuit that helps to focus or refine a law that some claim has questionable constitutionality. When those in California are faced with such disputes, they often turn to a skilled attorney who is well-versed in current changes in the laws.