Passing of Prop 22 in California keeps gig workers as contractors

4 Nov 2020133 Views

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Proposition 22 has passed in California, meaning gig workers for companies such as Uber are exempt from one of the state’s labour laws.

Following a lucrative lobbying campaign, tech companies such as Uber have claimed a major victory in the state of California. As reported by the San Francisco Chronicle, Proposition 22 passed yesterday (3 November), which means that drivers, couriers and others working in the so-called gig economy can remain as independent contractors and do not have to be reclassified as employees under the state’s newly introduced labour law.

Uber, Lyft, Doordash and other companies had spent more than $205m campaigning in favour of the ballot measure, arguing that those using their platforms to earn a living were reliant on the flexibility of an independent contractor model.

Prop 22 states that app-based drivers can be exempt from California’s AB-5 law, which was introduced this year. The aim of AB-5 was providing gig workers with better wages and benefits by reclassifying them as employees rather than contractors.

Earlier this year, a judge in California ruled that ride-hailing businesses Uber and Lyft must classify their drivers in that state as employees, alleging that were misclassifying drivers under AB-5. Last month, Uber and Lyft lost their appeal against the court’s decision.

If Prop 22 had failed, companies that employ these independent contractors could have been liable to pay hundreds of millions of dollars in employee expenses. Uber also previously claimed that it would have to shut down its business in California temporarily to implement the changes under AB-5.

‘We are fighters’

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With the passing of Prop 22, gig economy workers will be exempt from AB5, meaning that companies will not be obliged to provide them with typical employee benefits such as health insurance or access to a minimum wage. However, Uber and Lyft have agreed to supply workers with some forms of benefits.

In a statement, Uber said: “California voters agreed that instead of eliminating independent work, we should make it better.

“Soon, drivers in California will be guaranteed a minimum earnings standard of 120pc of minimum wage and will gain access to important new benefits like healthcare, accident insurance and more.”

Labour groups opposed to Prop 22 had spent approximately $20m, arguing that they were defending workers’ rights. Nicole Moore, a driver and organiser with Rideshare Drivers United, said on Twitter that the group was “outspent 20:1” and “outgunned”.

“We haven’t gotten this far because it was easy. We are fighters,” she wrote. “And we punch above our weight. We stand strong when we stand together. We will fight – in the courts, in Sacramento, and in the streets.”

Colm Gorey is a senior journalist with Siliconrepublic.com

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