A federal appeals court in California ruled that Uber’s challenge to a state law aimed at reclassifying transportation gig workers as employees cannot go forward, handing a major defeat to the tech firm as it attempts to control costs.
California AB5, which passed in 2019, intended to make app-based workers — such as those for Uber, Lyft and Postmates — full employees with a minimum wage, workplace protections and other benefits, our colleague Nick Robertson reported.
The law was immediately challenged by Uber and struck down by an appeals court after years of deliberation.
Monday’s ruling from an 11-judge panel of the 9th Circuit of Appeals reverses the first appellate decision, determining the law does not illegally single out transportation gig workers, but merely changes regulations for all independent contractors.
The California Legislature “perceived transportation and delivery companies as the most significant perpetrators of the problem it sought to address — worker misclassification,” Circuit Judge Jacqueline Nguyen wrote in the court’s decision.
Companies like Uber have strongly fought back attempts at requiring their workers to be considered employees because employees incur significantly more costs than contractors.
Read more in a full report at TheHill.com.
