California Assembly Bill 5
This bill, which went into effect January 1, 2020, states that any worker who performs services for a company in the state of California must be classified as an employee, rather than an independent contractor, as some workers had previously been. This law will impact companies like Uber, Lyft, Postmates, and DoorDash, along with the employees who work for them. For companies, the law means that they have to grant workers benefits like overtime, sick leave, unemployment, and minimum wage. For employees, it means less flexibility among gig economy jobs.
Marie Trimble Holvick, partner at Gordon & Rees law firm, who spoke with Specialty Food News about recent and upcoming regulations affecting the food industry, notes that this new law doesn't just affect large tech companies like Uber, but it will hurt small businesses, too. “The hard thing for any startup is that you often don’t have the capital to go out and hire employees. It’s a really easy method to find contractors … and you pay them a specific task. This new law means you can't do that anymore.”
Some companies are taking legal steps to fight against the law. Uber and Postmates filed a suit in December 2019 to prevent the law from taking place, claiming that it is "an irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy." However, the request was rejected by a federal judge who said that the companies had proved they could suffer a degree of irreparable harm because of the law, but it was more important to set a living wage and regulate employment.
But some companies, like the California Trucking Association, have been successful in lobbying against the law. In January, the association was granted a preliminary injunction that prohibits state officials from enforcing the law against motor carries. The prohibition will remain in place while the Association’s lawsuit goes to trial.
ADA Accessibility Guidelines Around Websites
Under Title III of the Americans with Disabilities Act of 1990, companies must make their businesses accessible to those with disabilities. However, the act is unclear about how this pertains to the online presence of a company. The ADA has provided guidelines for websites, which include adding text equivalents to images, posting documents in a text-based format, allowing for customizable text colors and sizes, and including audio descriptions and captions. But these guidelines are merely best practices, not federal law.
Despite that fact, the number of lawsuits filed against companies with inaccessible websites increased exponentially in 2019; a pattern that will surely continue into 2020. This means that companies must stay vigilant around these guidelines. Holvick warns that many consumers and attorneys are preying upon small companies, hoping they will pay to settle the case rather than face pricey litigation.
California Arbitration Act
Under this act, California employers are no longer able to require employees to sign mandatory arbitration agreements that force discrimination, harassment, and wage claims into arbitration. The new law doesn’t apply to agreements already in existence in California, or any agreements that an applicant or employee voluntarily enters.
Even though many employees believe that arbitration means that a company wants to keep things under wraps, Holvick believes that, for wage claims, arbitration can be a more efficient process than litigation.
The law was supposed to go into effect on January 1, 2020, but a full preliminary injunction was granted on January 30, preventing it from taking effect until the case is resolved.
Related: CA Gig Economy Bill Goes Into Effect Despite Oppostion; Panelists Provide Updates on Regulatory Challenges.
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