What's Ahead for California's Gig Workers?

A new law is set to take effect in California on January 1 that could significantly shift the landscape for the "gig economy" and freelancers across the state: Assembly Bill 5 (or AB 5) will require businesses to reclassify workers like ridesharing and food app delivery drivers as employees and not contractors, giving them access to minimum wage and benefits such as overtime, workers' compensation and health insurance. 

Another group that's targeted in the legislation are freelance journalists. (Vox Media, the parent company of sports site SB Nation, has already taken action and laid off hundreds of freelancers before the law goes into effect.) 

Villanova University professor Cheryl Carleton, PhD, is an expert on labor economics and the workforce who, in conjunction with Mary Kelly, PhD, recently published research on alternative work arrangements and job satisfaction.

"By making them regular employees of the company, workers that firms do hire would gain some benefits, and the government may gain some unemployment insurance payments," Dr. Carleton said about California's AB 5 legislation. "Such a law may be great for them. However, other workers will be worse off because they will be losing just what they wanted—the ability to work when and where they want."

"Some of these workers may already have needed benefits through a spouse or significant other or through another job," she continued. "Perhaps they are retired and already have access to those benefits. Still, other workers may not be able to take a regular job with its rigid hours, so they will not be able to work at all."

Dr. Carleton also noted that there is a larger issue about how benefits are provided in our economy. 

"Benefits such as medical insurance, pensions and sick and disability leave are provided through one's place of employment. To the extent that these other working arrangements are growing in popularity, the best approach may be for us to rethink how such benefits are offered," she shared. "It may be that more should be offered by the government to citizens, which then would allow them the ability to choose the job(s) they want that fill the needs they have."

To speak with Dr. Carleton or Dr. Kelly, please click on the "View Profile" links featured on this page.