Reuters is reporting that Uber and Postmates have filed a lawsuit in an attempt to block a California law that would have severe ramifications for both companies.

California’s Governor Gavin Newsom signed a law that makes it more difficult for companies to classify gig workers as independent contractors. Keeping workers classified as contractors saves companies money in both taxes and benefits. Labor groups, however, have argued the law was necessary to properly protect workers’ rights.

Uber and Postmates’ lawsuit alleges that the law “compromises the flexibility prized by their workforce, and that fewer workers would be hired were they considered employees.” They also argue that the law violates the equal protection guaranteed by the U.S. and California constitutions, by singling out app-based workers.

“It irreparably harms network companies and app-based independent service providers by denying their constitutional rights to be treated the same as others to whom they are similarly situated,” the lawsuit alleges.

Given the size of California’s economy, other states with similar concerns will be closely watching to see if the law holds up or is ultimately overturned.