Uber (NYSE:UBER) and Postmates are heading to court to try and stop a new California freelance law called Assembly Bill 5.
This new law will reclassify the two companies’ employees and no longer consider them freelance workers. This will require the companies to treat them like normal employees, which includes all the pros and cons typical workers deal with.
A lawsuit from Uber and Postmates seeks to challenge this change by arguing that it hurts “gig work” that lets employees choose when and how much they want to work. Joining in on the lawsuit is a driver from each of the companies.
It will be up to a judge to determine if the new California freelance law does go against the constitution. If so, an injunction could be filed that temporarily, or permanently, blocks the law from affecting these two companies, reports The New York Times.
The new California freelance law could also have negative effects on other workers in the state. Here’s what David Swanson, departing President of the Society of American Travel Writers, told the Los Angeles Times.
“If I’m a publisher from out of state and I have a choice of hiring a writer from California to do a job, or somebody from Colorado or Texas or Canada or India — and I’d have no chance of being sued — who do you think I’m going to hire? AB 5 simply makes it unattractive to hire writers from California.”
As of this writing, William White did not hold a position in any of the aforementioned securities.