The gig economy has become more and more popular for those looking for flexible working schedules. Many people who drive for Uber, Lyft or Amazon fit driving into their lives to supplement income as a side job. But others have switched to driving full time.
As independent contractors, people who drive in the gig economy have no access to employer benefits like workers’ compensation. But a California bill currently in legislature hopes to change that.
Passing an ABC test
The bill would reclassify independent contractors as employees if they cannot pass the ”ABC” test. The test has three parts that determine if a person should be an employee or independent contractor:
- Is the person outside of the control of the person or company that hired them?
- Is the person doing work that the person or company who hired them doesn’t normally do?
- Does the person have his or her own job or own a business independent from the hiring person or company?
If a worker falls outside of this standard, employers would have to consider them a regular employee. Any benefits the employer offers its regular employees would have to be available to these workers as well.
Why this is important for gig workers
If you work in the gig economy, this would mean that benefits like workers compensation would be available to you. Currently, most gig economy companies only insure for liability or collision in an accident.
But if you have an accident while driving, an injury may prevent you from working. Without a workers’ compensation policy available, you cannot get workers’ compensation benefits for loss of income. And if driving is the main source of your income, this could force you to dip into your savings for costly medical bills while you are unable to drive.
Workers’ compensation is an important coverage for employees. It covers employees when they injure themselves while working. The bill currently going through the California legislature could make sure that the growing gig labor force has proper workers’ compensation coverage.