The Washington state Senate passed a law Friday that grants drivers certain benefits and protections while preventing them from being classified as employees — a long-standing priority of taxi companies such as Uber and Lyft.
While the vote appears to be paving the way for eventual approval after a similar measure passed by the House of Representatives last week, the two bills have yet to be reconciled before being sent to the governor for approval. Gov. Jay Inslee has not said whether he plans to sign the legislation.
Mike Faulk, a spokesperson for Mr. Inslee, said Friday that the governor’s office usually didn’t “speculate about bills,” adding, “Once lawmakers send it to our office, we’ll evaluate it.”
The Senate legislation — the result of a compromise between the companies and at least one prominent local union, the Teamsters — passed 40 to 8.
In a statement, John Scearcy, secretary-treasurer of Teamsters Local 117, said the union was “proud to stand in solidarity with Uber and Lyft drivers in winning their demands for pay raises” and other benefits.
Uber and Lyft have noted in regulatory filings that requiring drivers to classify as employees would force changes in their business model and expose them financially. They’ve sought similar compromises in states like California and New York, but those efforts failed amid resistance from other unions and workers’ lawyers, who argued that gig drivers shouldn’t settle for second-class status. Many of those proponents also criticized Washington’s bill.
“While the bill offers some benefits to drivers, it would permanently lock the door on drivers accessing their rights as employees,” said Brian Chen of the National Employment Law Project, an advocacy group. “That’s a misstep with serious consequences, and that’s worrying given how quickly this bill is moving through the legislature.”
Under the compromise, drivers would receive benefits such as paid sick leave and a minimum wage. The bill would also create a process for drivers to appeal so-called deactivations, which prevent them from finding work through the companies’ apps.
While minimum wages only apply to the time drivers spend with a passenger in the car, proponents of the bill say the rates are high enough to fairly compensate drivers for all of their working time after expenses. Rates will be adjusted over time to reflect the rise in the cost of living.
As with other contractors, drivers must cover all payroll taxes and are not allowed to form unions under federal law.
The bill is largely silent on unemployment benefits, something that workers are entitled to, but Washington state has often found that gig drivers should already be receiving those benefits. The bill will create a task force to examine what the gig companies’ contributions to an unemployment insurance trust fund should be, an issue controversial in other states.
One particularly controversial feature of the bill is that it would block local jurisdictions from regulating drivers’ rights. A similar feature helped fuel the opposition that shattered prospects for such a bill in New York state last year.
Seattle passed a robust minimum wage bill for gig drivers in 2020, which was intended to provide drivers with an hourly wage of about $30 before expenses and has been sharply criticized by gig companies. The statewide law passed Friday kept Seattle’s current rates, which will remain higher than the rest of the state. but would anticipate similar legislation in the future.
In the background of Washington state legislative action, the possibility of a ballot measure that could have retained contractor status with weaker benefits for drivers loomed. After California passed a law in 2019 effectively classifying gig workers as employees, Uber, Lyft and other gig companies spent about $200 million on a ballot measure, Proposition 22, that rolled back that protection. The legislation is still being litigated after a state judge found it unconstitutional.
Representative Liz Berry, who introduced the Washington State law, said the differences between the law and Proposition 22 “couldn’t be greater.”
“My focus was: what do the workers want? What do the drivers ask? And we deliver whatever they asked for,” Ms. Berry said in an interview, adding that, unlike California law, “our bill has real benefits that Washington state employees enjoy.”
Jen Hensley, Lyft’s head of government relations, said in a statement that the bill is “a solution that Washington state officials overwhelmingly support. Not only does it bring meaningful new benefits, it extends important protections for them.” An Uber statement echoed those comments.
But some Washington lawmakers had doubts.
Ahead of Friday’s vote, Senator Mike Padden, who opposed the bill, expressed concerns about the speed of the approval process. “I have some concerns about the bill itself, but I’m also concerned that I can’t really control it properly,” he said.
Representative Debra Entenman, the only Democrat to vote against the bill in the Washington House of Representatives, said in a statement following the Senate’s approval that “this bill requires too much from the state, undercuts drivers and lowers transportation costs for drivers.” my constituents who often rely on rideshare companies due to insufficient public transportation.
Workers’ advocates feared other states would try to replicate the legislation. “I hope Governor Inslee seeks additional analysis of its potential impact,” said Terri Gerstein, a labor rights attorney with Harvard Law School’s Labor and Worklife Program. “I would urge other states not to use this bill or this volatile public process as a model.”
