By Jimmy Vielkind
ALBANY -- New York state lawmakers said they had concerns about the phrasing of a new California law intended to reclassify contract workers for app-based companies as traditional employees, as they prepare their own gig-economy legislation.
Assemblyman Marcos Crespo, a Democrat from the Bronx who chairs the chamber's Labor Committee, said during a Thursday hearing that California's new law exempts many professions and has prompted legal challenges. Ride-hailing companies including Uber Technologies Inc. and Lyft Inc. are backing a ballot initiative to undo the law next year.
"The California language and the aftermath of their legislative process demands that we take a strong look at language and the clarity of it," Mr. Crespo said.
Labor unions are pushing for a similar bill in New York, saying it would extend mandated employment benefits such as overtime pay, unemployment insurance and paid leave to workers in the gig economy. Groups representing tech companies say reclassifying workers would raise costs and stifle innovation.
The California law, which takes effect Jan. 1, uses a three-pronged, so-called ABC test to classify workers as employees rather than contractors. To be exempted, companies have to show that workers have control over over which tasks they are assigned, are doing work outside the usual course of the company's business, and regularly operate independently.
State lawmakers in New Jersey are considering similar legislation.
Mr. Crespo said he was still preparing a bill and hoped it would be introduced before or shortly after New York lawmakers return to the Capitol next month. But he suggested there was still work to do.
"It's just really difficult because every company, every industry operates so differently," he said. "There are nuances that I don't think you could ever accomplish in three questions."
State Sen. Diane Savino, a Democrat from Staten Island who is working with Mr. Crespo on the legislation, said she shared his concern. She said it appeared California rushed into a very complicated area.
The California bill was introduced last December by Lorena Gonzalez, a Democratic assemblywoman, to codify a 2018 state Supreme Court decision that set new standards for classifying people previously considered independent contractors as employees.
During the hearing in Albany Thursday, people representing livery-cab dispatchers, travel advisers and other freelancers said they appreciated their flexible work arrangements and feared an ABC test would put them out of work.
"We're all scared," said Donna Liquori, a freelance writer who lives near Albany. "We're hearing from people who are being turned down for work now based on the proposed legislation in New Jersey."
Groups representing technology companies said the ABC test would be difficult to administer, particularly for people who simultaneously log in to multiple mobile applications at once seeking jobs.
Christina Fisher, executive director for the Northeast of TechNet, a trade association whose members include Uber, Lyft and the delivery company Postmates, said many app-based workers only log in a few hours a week.
"We find it important not to put a one-size-fits-all on this," Ms. Fisher said.
Richard Blum, a staff attorney for the Legal Aid Society, which represents low-income workers in employment cases, said misclassification is a major problem and that New York has already enacted laws placing an ABC test on truckers and construction workers.
"It's worked fine," he said. "We have a basis, we have a model. What we need is to expand that model."
Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com