Adopted in California law on employees of Uber and Amazon may significantly increase the cost of such services

On 11 September, the California Senate 29 votes to 11, approved the law regulating the relations of Uber, Lyft, Amazon, DoorDash and other players of the so-called sharing economy on people.

As writes “Kommersant”, the document which must now be signed by California Governor Gavin news, will come into force on 1 January 2020. After that, services are plenty of drivers and couriers, will be difficult to prove that these workers are independent contractors, not salaried employees.

Under the new law to contractors will treat only people who are engaged in work that is not related to the main activity of the company; people who have their own business or main work, provided that the service does not control their working hours. The drivers of Uber or Lyft, which have repeatedly staged strikes and sued by companies that do not fall under these criteria. This means that after the law came into force, they will be considered employees of the companies and they will act social guarantees, such as insurance, maternity leave, minimum wage and overtime.

“Today the so-called Giga-companies present themselves as innovative future of tomorrow, a future where companies do not provide social security and do not pay health insurance. Let us speak clearly: there’s nothing innovative to underpay someone for his work. Today we are shaping the future of the California economy,” said California Senator from the Democratic party Maria Elena Durazo.

The law may hit the taxi services or delivery, which now have a relatively small staff. So, Barclays and Macquarie Capital believe that additional payments from Uber and Lyft in California can range from 2 thousand to 3.6 thousand per driver per year for Uber we are talking about additional costs of $ 500 million a year, but in General, the new law will increase the costs of such companies by 20-30%. If the example of California will follow other States and foreign States, the consequences for business companies will be even worse.

Note that the services which are regulated by this law, have suggested a compromise, granting workers some of the social safeguards under condition of preservation for them of the status of the contractors and not employees. Now Uber, Lyft and DoorDash has announced its intention to allocate $ 90 million to conduct a referendum in California on this issue.

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