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Ballot box win enables more California employers to use contractors

| Dec 3, 2020 | Employer Defense

California voters overwhelmingly approved the new ballot measure California Proposition 22 that allows certain workers to be reclassified as independent contractors instead of employees. This refutes the 2019 state law that took a more inclusive interpretation of employee classification. The most high-profile corporate advocacy of Prop 22 was Uber and Lyft rideshare companies, but there were other gig workers in the film industry, hair stylists and tech people who wished to remain contractors.

Labor advocates likely to fight back

This vote does lay some gig economy questions to rest, but the state with a reputation for worker-friendly laws may see further changes. The law was not even in effect before labor lawyers looked at the measure’s constitutionality to determine how to bring a challenge in court. A primary focus is the measure’s requirement that the legislature will need a seven-eighths majority to make any changes to it – while other ballot measures have included the same restriction, its inclusion in Prop 22 could impact the state’s ability to regulate collective bargaining.

While the measure would change regulations involving contractors, it does not exempt companies who were previously operating in violation of the then-current laws. For this reason and others, the state’s attorney general, three city attorneys and the state’s labor commissioner have brought lawsuits against Uber and Lyft.

This issue is far from settled

The rideshare platforms are the face of gig companies that use large numbers of contractors, but there are others out there. According to the New York Times, the fight over employee classification is a national one, with labor unions and legislatures in worker-friendly states still examining who qualifies as a gig worker.

Even if drivers and others remain independent contractors here in California and elsewhere, it seems likely that there will be some additional benefits regarding overtime, unemployment, vacation pay, and other benefits associated with full-time employment.

The debate continues in the coming weeks with regular updates. Those employers with concerns over how these changes affect their business’s compliance may want to consult with an employment law attorney practicing here in California. As the lawsuit against Uber and Lyft proves, waiting for favorable resolutions does not protect employers previously in violation.