On Monday, an American judge has overruled Uber’s request to ban labor law of California from being effective. According to the judge, public welfare has outweighed the concerns of the company. Reportedly, Uber, the ride-hailing giant, and Postmates, a courier service provider, and other equivalent companies have had filed the petition to stop the Californian law from taking effect. Dolly Gee, the U.S. District Judge in Los Angeles, said although the companies have had demonstrated the law could impose irrevocable harm to some extent. According to the judge, the probable risks to the companies mark less importance than the public’s curiosity in setting a minimum wage and managing employment.
Further than being the home country of many companies, the passage of AB5 or California Assembly 5 has made it a battleground. The law determines a much firmer explanation for what represents an independent contractor as vs. an employee. The 24-page judgment is a setback for the alleged gig economy’s employers who had aimed to stop the bill. Even more, the decision will make it challenging for companies to list their employees as independent contractors instead of workers. Apart from this, the law could place Uber and its type on the hook for preliminary job protections, including healthcare and after-hours’ payment.
After gaining a green signal in September 2019, the AB5 legislation became effective from January 2020. The effort followed controversies from the company and resulted in a court filing. Well, the judgment will have no immediate effect on the gig workers. Gee has not ruled on the substance of the matter, and her opinion will not halt the litigation. According to Postmates, Gee has taken the decision as a procedure. Thus, the company aims to follow the matter on its merits. Postmates added it had reviewed all legal procedures, including a petition. On the other hand, Uber said it had studied the judgment. Even more, the ride-hailing giant thinks whether to continue an appeal.
