A recent ruling by the 9th Circuit Court of Appeals has upheld California’s Assembly Bill 5 law (AB 5), which moved to classify many gig workers, including those employed by major ride-share and food delivery giants like Uber and Postmates, as employees rather than as independent contractors. If you believe this ruling affects your employment status, consulting a California employment lawyer can provide clarity on your rights and obligations. For those impacted by this change, seeking advice from a reputable California employment law firm can be crucial to navigating the new legal landscape. If you find yourself needing to understand these changes, it might be time to consult a San Bernardino employment attorney to ensure your rights are protected.
Explaining AB 5
AB 5, passed back in 2019, designates the ABC test to evaluate and decide whether a worker is an employee or if they are to be regarded as an independent contractor. According to this test, a worker is considered an employee unless they:
- They are free from the control and direction of their hiring entity in the performance of their work.
- They perform work that is outside the usual scope of the hiring entity’s business.
- They are employed in an independently established trade, occupation, or business of the same line as the work being performed under the employer.
The classification is critical because employees are entitled to considerably greater and more extensive protections under labor laws, both state and federal, than independent contractors. These protections include things like minimum wage, overtime pay, worker’s compensation, unemployment, paid sick leave, and paid family leave.
AB 5’s Effect on Gig Workers
For gig workers, especially those in the ride-hailing or ride-share and delivery sectors, being classified as employees under AB 5 means accessibility—access to advantages and protections that these types of workers have been previously denied under the category of “independent contractor.” It’s an overwhelming transformation to be classified as an employee instead of an independent contractor.
- Minimum Wage and Overtime Pay: Employees are guaranteed a minimum hourly wage and overtime pay for hours worked beyond the standard workweek.
- Health and Safety Protections: Employees are covered by workers’ compensation in case of injury and have the right to a safe working environment.
- Unemployment Insurance: Workers who lose their jobs are eligible for unemployment benefits, providing financial support while they search for new employment.
- Paid Leave: Employees are entitled to paid sick leave and family leave, which ensures they can take the time off they need should a concerning health matter arise or a difficult family crisis without the fear of losing income or their position.
The Implications of Proposition 22
While AB 5 sets a precedent for worker classification, the passage of Proposition 22 in 2020 has complicated its implementation for app-based drivers. Prop 22 exempts companies like Uber, Lyft, and DoorDash from AB 5, which in turn allows them to resume categorizing drivers as independent contractors. If you’re unsure how these conflicting laws affect your status, consulting an employment law firm in California can provide valuable insights. The initiative, backed by significant financial contributions from these massive companies, promised drivers some benefits, like minimum earnings and healthcare subsidies, but not to the extent an employee classified under AB 5 would receive. To fully understand your rights and potential benefits, it might be necessary to speak with an employment attorney in California.
The Court’s Ruling
On June 10th, 2025, the 9th Circuit Court of Appeals ruled that AB 5 does not unfairly single out app-based transportation giants. The court found that the California legislature had rational reasons for targeting these companies due to their significant role in worker misclassification issues. The ruling came after a previous decision by a three-judge panel that had sided with Uber and Postmates, claiming the law showed bias against these companies.
However, Judge Jacqueline Nguyen, on behalf of the 11-judge panel, found that transportation and delivery companies could reasonably be viewed as the most significant perpetrators of worker misclassification. The court’s most recent development accentuates its power to regulate these industries in the name of protecting workers’ rights without overstepping the constitutional rights of corporations.
A Legal Battle That Is Far From Over
Despite the current outcome, the legal battle over worker classification remains persistent. Proposition 22 is a controversial issue, with its constitutionality being examined and checked by the California Supreme Court. If the court sees Proposition 22 as unconstitutional, it could be overturned, bringing app-based drivers under the full spectrum of protection of AB 5. The potential change would have a profoundly colossal effect on the greater gig economy in California and could make an impression on gig workers and state legislatures across the US. App-based companies would need to adjust their business models to comply with employment laws, potentially increasing costs but providing their workers with significantly improved protections and benefits.
What Does All This Mean for You as a Worker?
The recent court ruling for gig workers in the State of California is a big step toward securing greater labor rights and protections. Staying informed about legal developments regarding AB 5 and Proposition 22 is imperative, as the legal layout is constantly evolving. Understanding the benefits and protections you are entitled to as an employee is pivotal when it comes to advocating for yourself. If you believe you have been misclassified as an independent contractor or are unsure about your rights, consulting with an experienced employment lawyer can provide the clarity, support, and confidence you need to move forward. Call us today at 909-884-6451 to get started.
