The fight for and against the “gig economy” goes on, as California voters passed Proposition 22 in California in November. One of the biggest employment topics in California over the past year relates to Assembly Bill 5. This bill went into effect on January 1st, 2020.
As per Assembly Bill 5, rideshare companies like Lyft and Uber must convert all of their independent contractor drivers into employees and provide access to workers’ compensation and other benefits that full employees get. However, the passage of Proposition 22 in November of 2020 has changed the conversation yet again, as it changed how the rideshare companies must classify their workers.
Was Assembly Bill 5 repealed?
Not exactly, the passage of Proposition 22 represents a less severe version of assembly Bill 5. Proposition 22 does not offer gig economy workers protections like unemployment insurance, family leave, sick leave, the right to unionize or workers compensation. However, Proposition 22 does offer Lyft and Uber drivers a minimum earning base depending on “engaged time.”
What else is significant about Proposition 22?
It is notable that Proposition 22 was the costliest ballot measure in the history of the state of California. This is unsurprising, given that the original reclassification plan would have meant major cash flow problems for the rideshare companies.
There are also potential future ramifications for independent contractors and employee classification groups as the debate goes on. It is highly likely that the passage of Proposition 22 will put gig economy companies in a stronger position to defend themselves against future attempts to reclassify workers.