Prop 22 Blows a Hole in California’s Independent Contractor Law

It’s official. California voters have voted “overwhelmingly,” (winning by almost 59% of the vote) to allow “gig economy” companies like Uber and Lyft to continue treating drivers as independent contractors.

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Gig economy companies like Uber funded the ballot measure after a 2018 California Supreme Court ruling, later codified in a 2019 state law called “AB 5” mandated that workers who performed tasks within a company’s regular business — and were controlled by the company and did not operate their own firms — must be classified as employees, with all of the attendant benefits and payroll taxes.

Neither Uber nor Lyft complied with the new law, which resulted in the state attorney general and the city attorneys of Los Angeles and San Diego, suing Uber and Lyft in an effort to enforce the law.

Prop 22 offers a wage floor and limited benefits to drivers, such as:

  • limits drivers from working more than 12 hours during a 24-hour period, unless the driver has been logged off for an uninterrupted 6 hours;
  • for drivers who average at least 25 hours per week of engaged time during a calendar quarter, require companies to provide healthcare subsidies equal to 82% the average California Covered (CC) premium for each month;
  • minimum earnings guarantee based on “engaged time” when a driver is fulfilling a ride or delivery request, but not the time they spend waiting for a gig.

Prop 22 does not offer workers’ compensation, unemployment insurance, family leave, or sick leave, or allow workers to unionize.

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Prop 22 does not ONLY apply to Uber and Lyft. While Prop 22 was largely designed and funded by Uber, Lyft, and DoorDash, it applies to all “app-based drivers,” including food delivery drivers and ride-share drivers who use a personal vehicle. Thus, other companies benefiting from Prop 22 include, for example, Postmates and InstaCart.

What Happens After a California Proposition Passes?

Once election results are certified for a ballot proposition in California, it becomes a part of the state constitution (if it is a proposed amendment) or the state’s statutes (if it is a proposed statute) in the same manner and having the same legal effect as if it had been passed by the state legislature and signed by the governor.

Can California Legislators Amend or Revoke Prop 22?

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Not really! Prop 22 was written specifically to be very difficult for California legislators to amend. Amending Proposition 22 requires a seven-eights (87.5%) vote in each chamber of the California State Legislature and the governor’s signature, provided that the amendment is consistent with, and furthers the purpose of, Proposition 22. Changes that are not considered consistent with, and furthering the purpose of, Proposition 22 require voter approval. Basically, if the California legislators who hate Prop 22 want it changed, they have to convince California voters to approve another proposition.

What do you think? Are the worker protections in Prop 22 sufficient?

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