For the app-based driver, the answer is clear, but for the tens of thousands of other gig economy workers in California, Prop 22 has no effect whatsoever on contractor relationships. Still, care must be taken in proper worker classification.
Following the California Supreme Court decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles and California Assembly Bill AB 5, which instituted the ABC Test for worker classification in California, Uber and Lyft rideshare companies funded California Proposition 22 which passed on November 3, 2020 and provides for the following:
- Classifies drivers for app-based transportation (rideshare) and delivery companies as “independent contractors,” not “employees,” unless the company sets drivers’ hours, requires acceptance of specific ride and delivery requests, or restricts working for other companies;
- Specifies that independent contractors are not covered by various state employment laws—including minimum wage, overtime, unemployment insurance, and workers’ compensation;
- Independent contractor drivers would be entitled to other protections such as minimum earnings, healthcare subsidies, and vehicle insurance;
- Restricts some local regulation of app-based drivers; and
- Criminalizes impersonation of drivers.
For the rest of the contract workers in California, those independent contractor relationships will be scrutinized under Dynamex, AB 5, and the recently-past AB 2257 which modified AB 5, and will therefore fall under the highly restrictive ABC Test, unless the industry, profession, and relationship fall under one of the exceptions specified in AB 2257.
The good news regarding these non-Proposition 22 relationships is that there are numerous exceptions in AB 2257. Please contact our office to find out whether your contractors may be able to take advantage of such an exception.