“AB 5 was signed into law by Governor Newsom on September 18, 2019 and became effective on January 1, 2020. AB 5 modified the California Labor Code to direct that a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all the following conditions are satisfied:

1. The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

2. The person performs work that is outside the usual course of the hiring entity’s business; and

3. The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

ALJ Robert Mason, assigned to this proceeding, issued a Ruling on December 19, 2019, asking for briefing on the applicability of the AB 5 criteria on TNCs. In response, the TNCs argued that their drivers met the criteria to be considered independent contractors. Others argued they do not and drivers are employees. On May 5, 2020, the California Attorney General, along with the City Attorneys for Los Angeles , San Diego, and San Francisco filed suit in Superior Court of the State of California, County of San Francisco, and are seeking injunctive relief, restitution, and penalties against Uber and Lyft for allegedly misclassifying their TNC drivers as independent contractors.5 Uber has filed a lawsuit in federal court for injunctive relief to enjoin the enforcement of AB 5 against it and its drivers.6 Lyft drivers have sued Lyft in federal court seeking an order requiring Lyft to reclassify all of its drivers in California from independent contractor to employee.