LOS ANGELES, Sept. 11 (Xinhua) -- Lawmakers in the U.S. state of California passed a landmark bill on Wednesday that requires companies like Uber and Lyft to treat contract workers as employees.

A Lyft ride hailing vehicle moves through traffic in Manhattan on July 30, 2018 in New York City. (File photo: VCG)

The legislation, known as Assembly Bill 5 (AB5), is considered to reshape the gig economy.

The bill passed the state Senate on Tuesday and received approval from the state Assembly on Wednesday morning.

California Governor Gavin Newsom endorsed the bill and is expected to sign it.

The measure, which would go into effect on Jan. 1, 2020, stipulates that workers must be designated as employees instead of contractors if a company exerts control over how they perform their tasks or if their work is part of a company's regular business.

AB5 has attracted staunch opposition from gig economy companies, as it could upend their traditional business model of hiring inexpensive contractors.