How Will California Assembly Bill 5 Change Gig Worker Training?
Last year, I wrote a blog post about the ways gig economy workers can be enticed to take voluntary training. Training and the gig economy can be a difficult mix for several reasons, but that reality might be changing.
Last year, California passed Assembly Bill 5 (AB 5), a law that requires companies like Uber, Lyft and Postmates to treat their workers as employees rather than independent contractors. The bill was gaining national attention, and it appeared other states might follow suit.
AB 5, which went into effect at the start of 2020, formalizes the distinction between independent contractors and employees. According to the new law, a worker is a contractor only if they perform work that is “outside the usual course” of the company’s business. All other workers must be classified as employees, and given the same rights when it comes to minimum wage, benefits, and it must be assumed — training.
Training hasn’t been discussed much in the news since AB 5 went into effect, and with good reason; it’s been overshadowed by legal challenges from the gig economy companies it targets, by its inadvertent effect on other industries and, most recently, by the complicated and difficult effects AB 5 has had on California’s gig workers and freelancers during the coronavirus crisis. There is even a movement to delay the law until after the quarantine so that freelancers can find more work.
Despite all of these challenges, AB 5 is a landmark law that might eventually change the way the sharing economy approaches training. So what might AB 5 mean for training? And why is training so important in the gig economy? Let’s start with a quick review.
Why can’t sharing economy companies offer mandatory training?
Here’s the trouble with the gig economy and training in a nutshell: because most gig economy workers aren’t classified as employees, their employers can’t legally force them to take training. Most gig economy jobs fall into the independent contractor category, which means there’s technically a straightforward exchange happening: the companies pay the contractors to do a job and the contractors do the job.
Under the law, it doesn’t matter how the job gets done — independent contractors are legally free from what the Internal Revenue Service calls “behavioral control.” This means employers should not be able to dictate how the job gets done and that means no training because, according to the IRS: “If the business provides the worker with training on how to do the job, this indicates that the business wants the job done in a particular way. This is strong evidence that the worker is an employee.”
There’s a lot of gray area in the gig economy. Most sharing economy companies do appear to want their employees to do their jobs in a uniform way, and training is good for everyone — well-trained employees are better at customer service, feel better prepared to handle tricky customer service situations, and are, in general, better representatives of their employers.
So what might training look like under any new law that reclassifies independent contractors?
What does Assembly Bill 5 mean for training?
If you’re the head of a gig economy company in California, can you now force your workers to take training?
The short, un-nuanced answer is probably yes.
The longer answer is more complicated. Assembly Bill 5 doesn’t specifically mention training, but the test of the law states that its intent is to ensure workers “have the basic rights and protections they deserve under the law, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave.”
That sounds like employment, and if sharing economy companies accept the law (or if their legal challenges come to nothing), this may mean they can beef up the voluntary training programs many gig economy companies have in place.
Most gig economy companies require workers to complete an orientation before they can start work as a way to be sure that workers get at least some training before they’re sent out to represent the company, but often workers online complain that they need more, seeking advice from each other through message boards or paying out of pocket for courses from third parties. If AB 5 and other such bills are requiring benefits, companies will be able control their own training materials, giving better (and mandatory) training to new employees and those who need to improve their skills.
This may also cut down on punitive training. For example, Uber drivers are required to take training for which they must pay out of pocket when their ratings decline before they can drive again. It’s a basic course, which takes four hours to complete. By requiring training, Uber can require better training before problems arise with drivers.
It’s early days, however. No one knows exactly how AB 5 will shape training for workers in the gig economy. The nation is in the grip of a crisis, AB 5 is the first bill of its kind, and gig economy companies are understandably resistant to reclassifying their employees. However, once the dust settles, and AB 5 is accepted, we’re likely to start seeing a new approach to the way the U.S. sharing economy trains its workers.