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New California Law Makes It Harder to Treat Employees as Freelancers
By City News Service
Published January 3, 2020

In this photo taken Tuesday, Dec. 16, 2014, a man leaves the headquarters of Uber in San Francisco. A ruling filed Tuesday, June 16, 2015 in the case of a single Uber driver could have much broader implications for the popular ride-hailing service and for companies like it that rely on part-time workers for on-demand services. (AP Photo/Eric Risberg, File)

A new California law that makes it harder for companies to treat workers as independent contractors goes into effect Jan. 1, making small businesses in and outside the state consider how they staff their operations.

The law puts tough restrictions on who can be considered independent contractors or freelancers rather than employees. Supporters say it addresses inequities created by the growth of the gig economy, including the employment practices of ride-sharing companies like Uber and Lyft, which use contractors, NBC4 reported.

Company owners with independent contractors must now decide whether to hire them as employees or look for help in other states. Another alternative: asking these workers to start their own businesses, a setup the law allows.

Although the law affects companies of all sizes and out-of-state businesses that use California contractors, it likely will have a greater impact on the many small businesses that have hired independent contractors because of limited staffing budgets.

Categories: Business | Economy
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