California Passes Prop 22: Gig Workers Identified as Independent Contractors

California voters passed Proposition 22, which legally exempts Uber, Lyft, and other “gig economy” companies from identifying workers as employees and labels those employees independent contractors instead. This measure has profound effects on people in California who work part- or full-time in gig economy jobs, and it may serve as a roadmap for other states looking to codify their stance on gig economy workers. To learn about all the ways that Prop 22 may impact your employment as a gig economy worker, call or contact an experienced California employment law attorney near you today.

What is Prop 22?

Proposition 22 was a measure that identifies workers for gig economy businesses such as rideshare and delivery companies as independent contractors instead of as employees. This means that drivers for these companies are not entitled to employee benefits like workers’ compensation, health insurance, or overtime pay. This law will go into effect in mid-December, and it will require that companies pay their drivers an hourly wage of at least 120% of the local or statewide minimum wage.

Under the passed proposal, workers who drive more than 15 hours per week are required to be given a stipend for healthcare coverage, and a larger stipend is required for drivers who put in more than 25 hours per week. Drivers must also be given access to occupational accident insurance to cover on-the-job injuries, which does include coverage for medical expenses and disability benefits.

Problematic Issues With Prop 22

One significant issue for workers is that under Prop 22, the minimum wage protection only applies for “engaged time,” which is just the time that a driver is en route or on a trip with a passenger. All other time driving does not qualify for that protection, which some experts say could result in some drivers making as little as $5.64 per hour. In addition, drivers will not be able to seek restitution for wage theft against the companies since they will now largely be solved through arbitration.

As independent contractors, drivers for these companies are also barred from formally unionizing, which will make advocating through collective bargaining for future worker protections or benefits extremely difficult. This will also put the onus on drivers to comply with future state regulations instead of the companies themselves. One example of this is the requirement that 60% of all ridesharing should occur with electric vehicles by 2030. The purchase and use of electric cars will fall to the drivers for compliance instead of the companies that use them.

Talk to a Knowledgeable Employment Law Attorney Today

While seen as a massive win for gig economy companies like Uber, Lyft, Instacart, and others, Prop 22 has serious implications for workers in California that engage in gig economy work on a part- or full-time basis. If you would like to learn more about how this new proposition may impact your employment, call or contact an employment law firm in your area today.