SACRAMENTO, Calif. (Nexstar) — As California leaders prepare to make billions in budget cuts for the upcoming fiscal year, Governor Gavin Newsom’s revised proposal is setting aside millions for a new controversial state law.
Newsom plans to put more than $20 million toward enforcement of Assembly Bill 5, the law that requires a number of independent contractors to be redefined as employees, with $17.5 million going to the state Department of Industrial Relations, $3.4 million to the Economic Development Department and $750,000 to the Department of Justice.
“It’s sick, to be perfectly honest with you,” Assemblyman Kevin Kiley, R-Rocklin, said.
Kiley, who is leading a legislative effort to repeal the law, is one of several Republican lawmakers outraged by the appropriation.
“The governor tells us this budget is stripped down to our most essential priorities, and apparently that includes $20 million to target independent contractors, to harass small businesses and fines, penalties and lawsuits at a time when many are struggling to remain in business at all,” Kiley said.
But Newsom and many Democrats continue to defend the law, which aims to protect workers from misclassification.
AB 5 faces a November ballot initiative to exempt a number of gig companies like Uber and Lyft. State Attorney General Xavier Becerra sued the companies last week.
“Letter of the law has to be applied. We want to be cooperative and collaborative, but we as a state have a responsibility to do what we said we were going to do,” Newsom said of the suit.
With exactly a month left to work out the budget facing a $54 billion deficit, Newsom spent Friday meeting with legislative leaders.
Some lawmakers prepared to push back on AB 5 funding.
“You have close to 5 million unemployment claims at this point, small businesses who would really actually use those funds,” Kiley said. “There’s so much better uses of that money that could actually do good.”
California’s budget is due June 15.
