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What Gig-economy Workers in California Need to Know About Their New Employment Laws

The gig economy is here to stay, and so are its implications for California workers. In the past few years, independent contractors, temp workers and other non-traditional employees have become the norm for many businesses. The gig economy has allowed people to take on jobs that fit around their lives rather than vice versa. However, this also means that these workers aren’t always covered by traditional employment laws – until now. With new laws that went into effect in January 2020, gig-economy workers need to be provided with basic employee benefits like paid sick leave and healthcare coverage. With so many recent change, it is important that you understand how this will affect you as an independent contractor or temp worker going forward.


What is the gig economy?

The term “gig economy” refers to a system where workers are hired as independent contractors rather than full-time employees. While contractors are often hired by different companies, they often have larger contracts that last for months or years at a time. The gig economy has become increasingly common in industries like insurance, marketing and consulting. However, it is also used in many other fields and industries where short-term workers are needed, such as construction, hospitality and transportation. For example, a company may hire an insurance agent to sell policies for a certain time period, but not to work indefinitely as an employee would.

California’s new wage and hour laws for gig workers

In May 2019, California Governor Gavin Newsom signed a bill into law that will make significant changes to the way employers can hire employees. These changes are largely intended to protect workers in the gig economy – the contractors who regularly use sites like Uber and Lyft, or who find opportunities on websites like Upwork and TaskRabbit. As of January 1, 2021, employers must follow the the new laws:

Minimum Wages for California Gig Workers

Gig workers will now be entitled to minimum wage and overtime pay as California’s new minimum wage increases.


Paid Sick Days for California Gig Workers

Gig workers will be entitled to paid sick days. This means that if you are sick or need to take time off to care for a sick relative or loved one, you will be able to do so without losing pay.


Paid Family Leave for California Gig Workers

Similar to paid sick days, California gig workers will now be entitled to paid family leave. This is a significant change as the law was previously only applicable to California employees.


Healthcare Coverage for California Gig Workers

Finally, the new law mandates that gig workers be provided with healthcare coverage of at least $100,000. While this may not seem like much, it is still a significant increase from the previous law.


Sick Days for California Gig Workers

California workers have long been entitled to paid sick days, but this is the first time that gig workers will have this right. Like other California employees, gig workers will be entitled to paid sick days after working for their employers for nine months. However, it is important to note that there are some significant distinctions between the way sick days work for California employees and gig workers. For example, gig workers will be able to take paid sick days for themselves and for family members. In addition, workers will be able to carry over unused sick days from one year to the next. This is not possible for California employees. Finally, a particularly important distinction is that gig workers will be able to take paid sick days for reasons other than illness. This includes situations in which the worker or a family member is seeking treatment for domestic violence.

Paid Family Leave for California Gig Workers

California workers have been entitled to paid family leave benefits since 2016. However, the law was previously only applicable to employees. As of January 2020, gig workers will also be entitled to paid family leave. The law allows workers to take up to 12 weeks of paid leave to care for a new child, or provide care for a family member who has been seriously injured or ill. It also allows workers to take time off in the event of their own serious illness. The paid family leave is part of a worker’s medical and disability benefits, which means that it is not paid for by their employers. A significant distinction between California employees and gig workers is that gig workers are entitled to 12 weeks of paid leave, rather than six.

What this Means for California Gig Workers

The gig economy is here to stay, and so are its implications for California workers. In the past few years, independent contractors, temp workers and other non-traditional employees have become the norm for many businesses. The gig economy has allowed people to take on jobs that fit around their lives rather than vice versa. However, this also means that these workers aren’t always covered by traditional employment laws – until now.


California’s new wage and hour laws also bring bring significant changes to the way employers hire gig workers. If you're an employer with independent contractors working for you, make sure you're following California's AB5 laws to avoid a misclassification lawsuit or fine.


Read about that here: California Independent Contractor Law: What You Need to Know (And How To Avoid Mistakes)


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