A federal appeals court in California ruled Uber’s challenge to a state law aimed at making transportation gig workers employees instead of independent contractors cannot go forward, handing a major defeat to the tech company as it attempts to control costs.

California AB5 was passed in 2019, intended to make app-based workers — such as those for Uber, Lyft and Postmates — full employees with a minimum wage, workplace protections and other benefits. The law was immediately challenged by Uber and struck down by an appeals court after years of deliberation.

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