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California Begins Battle Against Independent Contractors, Gig Economy

Sacramento California outside the capital building Last week it was reported that the California Labor Commissioner’s office sued its first company to enforce Assembly Bill 5 (AB5), the state’s 2018 law that requires a three part test to determine whether a worker is allowed to be an independent contractor. AB5 has caused thousands of independent contractors throughout California to lose their incomes, but that hasn’t stopped other states or federal politicians from trying to implement similar misguided policies in the name of protecting workers. Covid-19 has shown us that we need more resilient and flexible labor markets , not more rigid ones, and regulations that make it harder for people to work as independent contractors move us in the wrong direction.

The defendant in this case— Mobile Wash Inc. —is an on-demand car wash company that fits the gig-economy profile that proponents of AB5 and similar rules often target. Mobile Wash’s app allows customers to order car washes and detailing at a location the customer chooses (e.g. their home or work) from various providers. Mobile Wash is accused of misclassifying workers, failing to register as a car wash employer, failing to pay minimum wage, and failing to offer non-wage benefits […]

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