On November 3, 2020, California voters will have the option to vote yes or no on Proposition 22, which changes the classification of drivers for app-based transportation and delivery. The initiative is a response to the rapidly changing landscape of worker classifications in the gig economy.
On April 30, 2018, the California Supreme Court created an “ABC” test to determine whether an individual was properly classified as an independent contractor or an employee. Dynamex Operations W. v. Superior Court, (2018) 4 Cal. 5th 903. Importantly, employees, unlike independent contractors, are afforded certain protections such as overtime pay, minimum wage, and meal and rest periods. In 2019, Dynamex was codified into law by the California Legislature pursuant to Assembly Bill No. 5.
Under the Dynamex and AB No. 5, drivers for companies such as Lyft and Uber would likely be categorized as employees. In response, Proposition 22 creates a carve out for drivers to classify them as independent contractors. As such, it circumvents the current law and the accompanying protections provided to drivers classified as employees. In the alternative, it would grant drivers some protections such as a net earnings floor, a limit to hours worked and a healthcare subsidy.
To date, DoorDash, InstaCart, Lyft, Postmates, and Uber have contributed approximately $110,000,000.00 in support of Proposition 22.