Uber,Lyft and DoorDash have said they will spend $90 million to back aballot referendum in 2020 aimed at exempting them from the proposedlaw. (Photo: Shutterstock)

Gig workers in California will get a boost from AB5, a new billpassed by the California Senate and backed by Governor Gavin Newsomthat will make it tougher for companies to classify them asindependent contractors instead of as employees.

A Reuters report says that ride-hailing companies like Uber andLyft will feel the brunt of the legislation, which "would codify a2018 California Supreme Court decision, DynamexOperations West Inc v. Superior Court, that set out a new standardfor determining whether workers are properly classified asindependent contractors." The court decision found that state wagelaws cover workers as employees when the company controls theirwork or when they are integral to its business.

Related: What employers should know about California'sproposed worker classification bill

Uber, Lyft and DoorDash have said they will spend $90 million toback a ballot referendum in 2020 aimed at exempting them from thelaw, which would have far broader reach than just California due inpart to the state's large population and workforce.

"By approving AB5, the California legislature solidified ourstate's position as the national leader on workplace rights,setting the standard for the rest of the country to follow," theCalifornia Labor Federation said in a statement, while Lyft issueda statement saying, "We are fully prepared to take this issue tothe voters of California to preserve the freedom and access driversand riders want and need."

The legislation, which passed the Senate in a 29–11 vote, stillhas to go back to the Assembly for a "concurrence vote," expectedto happen by the end of the week, and Newsom has said he will signit. It also has broad support outside the state, from severalDemocratic presidential candidates including Sens. ElizabethWarren, D-MA, Bernie Sanders, I-VT and Kamala Harris, D-CA.

Businesses dependent on so-called gig workers are firmly opposedto such a measure since it could end up completely transformingtheir business models by providing employee status—and pay andbenefits—to workers currently classed as independentcontractors.

Read more: 

• Uber and Lyft strike: What's at stake for injuredgig workers?
• Gig work, data privacy and other workplace trendsto watch
• NLRB adopts business-friendly independentcontractor test