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  • Writer's pictureDavis Yu

Proposition 22 Passes: How this will Affect Gig Workers

November 12, 2020

With the recent election, California voters voted in favor of Proposition 22. Companies like Uber, Lyft, Doordash, and Instacart initiated the measure in opposition to Assembly Bill 5 (“AB 5”) that was passed in September 2019. AB 5, also known as the “gig worker bill,” required companies that hired independent contractors to reclassify them as employees.

Under AB 5, a three-factor test or “ABC Test” applied in order to determine whether an individual was classified as an employee or independent contractor. Governor Gavin Newsom signed AB 2257 into law, which further clarifies available exemptions from the ABC Test. AB 2257 does not include exemptions for gig economy companies.

AB 5 also offers additional employment protections. These additional protections include workers' compensation, unemployment, paid sick and family leave, and health benefits. However with the new classification, some argue that the lack of flexibility and choosing when to work prove to be a major disadvantage. For companies like Uber and Doordash, incurring these additional costs would likely pass on to consumers also contributing to longer wait times.

Prop 22 really came down to two options: 1) app-based ride share and delivery drivers maintain their status as independent contractors and preserve the job’s flexibility or 2) drivers have less flexibility but would gain standard employee benefits and protections. Prop 22 will enact labor and wage policies specifically for app-based drivers, however, they are independent from the state’s employment laws.

Such policies include limiting drivers from working 12 hours during a 24-hour period only with certain exceptions as well as requiring companies to provide healthcare subsidies to drivers based on their average weekly hours of engaged time. Engaged time refers to the time given to complete a ride or en route to a ride. It does not include the time a driver is logged into an app waiting for a job. Additionally, Prop 22 will require companies to provide or offer accident insurance.

Aside from the benefits offered, Prop 22 requires companies to develop policies regarding anti-discrimination and sexual harassment, conduct criminal background checks for all app-based drivers, and enforce zero-tolerance policies for driving under the influence. Moreover, the measure would require training programs for food safety information, safe driving, accident avoidance, and recognition and reporting of sexual assault and misconduct.

This measure will likely stay in the midst of opposing arguments and only time will tell where this law will go.

This article is specific to the laws of the State of California and is intended for informational purposes only. The article should not be construed as legal advice or a legal opinion based on any specific facts or circumstances. For specific questions related to this article, please contact an attorney.



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