Opinion: The constitutionality of California proposition classifying gig workers as independent contractors to be decided by the California Supreme Court

Unions in California, much like the unions here in Washington, are working to re-classify every independent contractor as an employee in an effort to swell the dwindling union ranks.

Mark Harmsworth believes Washington state legislators should learn from California’s expensive job killing legislation before attempting to follow a similar path

Mark Harmsworth
Washington Policy Center

Unions in California, much like the unions here in Washington, are working to re-classify every independent contractor as an employee in an effort to swell the dwindling union ranks. Disruptive new technologies, such as Uber and Lyft have changed traditional working patterns, allowing more freedom and flexibility for people that don’t fit the traditional 9-5 job and also don’t want or need to belong to a union.

Previous California anti-worker legislative actions, like Assembly Bill 5 (AB5) faced a public backlash. AB5 reclassifies freelance workers as employees, affecting job categories such as truck drivers, hairdressers, rideshare drivers and one of the most vocal groups, journalists. By changing the definition of a freelance worker, AB5 prevents an independent worker from working part-time or on a temporary contract basis. Journalists, as an example, can no longer write and submit work to different publishers; they must work for one exclusively.

The latest attempt to limit workers freedom is the Service Employees International Union opposition to Proposition 22, passed by the voters of California in 2020 by over 58%. The measure allows gig workers to continue working as independent contractors and was a direct response to reverse the negative effects of AB5.

Despite the problems with AB5, legislators in Washington State filed their own version of the troubled legislation in 2019. Senate Bill 6276 (SB 6276) would bring the same job killing restrictions, and presumably, a public outcry akin to the response we saw from hairdressers in 2019. Thankfully SB 6276 failed to garner any support and died in the legislative process.

The employment hiring process for employees is often more in depth than the hiring process for independent workers and freelancers. The increased cost of hiring a full-time employee is due to the commitment by the employer to the employee to provide benefits and job certainty. With the additional requirements legislation like SB 6276 would impose, including adding the right to sue an employer through Labor and Industries at taxpayer expense (the right to sue as an employee already exists) and the requirement of a bond for temporary workers, the cost to the employer will go up. This will translate into reduced wages for the temporary workers or higher prices for goods and services.

Minimum wage is applied to temporary workers, again increasing the cost to the employer. For temporary workers in areas outside Puget Sound, this increase in wage rate will increase the cost to hire the temporary worker. As we have seen in Puget Sound, employers will either choose to lay off employees or hire less temporary workers. Seattle’s failed Pay-Up legislation is a more recent example of when governments attempt to meddle in the free market, the result is a loss of jobs and increased costs.

California’s residents have woken up to the negative effects of restrictive legislation, such as AB5, by passing Proposition 22. The matter now is in front of the California Supreme court who will ultimately decide if the unions will succeed in overturning the will of the voters.

Washington state legislators should learn from California’s expensive job killing legislation before attempting to follow a similar path. Instead, legislators should allow new technology and new ideas to thrive in Washington, through the use of tax exemptions and incentives which will create new jobs and reduce costs.

Mark Harmsworth is the director of the Small Business Center at the Washington Policy Center.