HK’s Derek Ishikawa provided perspective on AB5, the California State Assembly’s proposed rule governing so-called “gig workers” (independent contractors) to the San Francisco Chronicle in a September 5, 2019 article entitled “Some sectors warn that AB5 could hurt workers, raise prices” (subscription required).
Supporters of AB5 include a strong Democratic majority, labor leaders, and Governor Gavin Newsom, all of whom believe the bill is necessary to provide safety net protections like unemployment insurance and workers’s compensation for hundreds of thousands of workers.
By some estimates, providing benefits to these workers could be prohibitively expensive, adding up to 30% to labor costs.
One example noted in the article was the impact the ruling could have on newspapers, which are often delivered by independent contractors. If these workers are reclassified, costs could go up in an industry already struggling with razor-thin profit margins. Fewer subscribers could impact the entire supply chain.
For example, Ishikawa noted, having fewer trucks on the road might impact consumer goods:
“I think you will see increased costs,” said Derek Ishikawa, a labor attorney with Hirschfeld Kraemer in Santa Monica, who represents businesses in employment disputes, including several trucking firms. “This is a big worry in the industry.”
Hirschfeld Kraemer will continue to monitor developments in this area.
TO READ THE FULL ARTICLE, CLICK HERE (subscription required).
Derek Ishikawa is an associate in Hirschfeld Kraemer LLP’s Santa Monica office. He can be reached at (310) 255-1803, or email@example.com.