One of the propositions on the ballot on November 3, Proposition 22, could have major implications for the future of AB 5 enforcement in California. If passed, the proposition would allow gig-economy companies like Uber, Lyft, and Instacart to classify their drivers as independent contractors instead of employees. These companies would be exempt from AB5, the new California law that requires most employers to classify their workers as employees. Courts have consistently ruled that Uber and Lyft have violated AB5 by refusing to reclassify their drivers as employees since AB5 went into effect on January 1, 2020. As recently as October 22, 2020, a California appeals court ruled that Uber and Lyft must reclassify their drivers as employees rather than independent contractors.
If Prop. 22 passes, Uber and Lyft would not need to comply with these court rulings. As independent contractors, their drivers would not receive many of the benefits and protections of the employment relationship, like minimum wage protections, paid sick leave, workers' compensation benefits if they are injured or unemployment benefits in they become unemployed.
Backers of Prop. 22, including Uber, Lyft, Instacart, Postmates (owned by Uber) and DoorDash, have poured more than $187.5 million into backing the bill, making it the most expensive proposition in California history and dwarfing the $15 million raised by the opposition, spearheaded by labor groups who have traditionally represented the interests of working people over corporate interests. Prop. 22 would not only apply to Lyft and Uber drivers, but would cover all drivers who work for a "delivery network company," potentially including FedEx, Amazon, Walmart, UPS, and any other companies that makes deliveries in California.
If passed, Prop. 22 would set a dangerous precedent in California. Companies who don't like laws that the Legislature passes, and who don't like court rulings requiring them to treat their workers fairly, could simply open their coffers -- filled with the profits they earn by not spending money on employee benefits -- and buy themselves a ballot proposition. Significantly, Prop. 22 contains a provision stating that it cannot be amended except by a 7/8 majority of the Legislature, effectively tying lawmakers' hands for the rest of eternity absent a new ballot proposition. California voters should reject this company-sponsored initiative and let the California Legislature do its job to govern in the interests of the people.
If you think you have been misclassified as an independent contractor, contact Teukolsky Law today for a free consultation.
A federal judge has ruled that Uber and Postmates failed to demonstrate that they were unconstitutionally targeted by AB 5, the new law that requires most California workers to be classified as employees rather than independent contractors.
The lawsuit, Lydia Olson et al v. State of California et al, alleged that AB 5 violated the equal protection clause because it targeted workers of app-based companies like Uber and Postmates, while exempting numerous other types of workers like hairdressers and real estate agents.
In her ruling, issued September 18, 2020, U.S. District Judge Dolly M. Gee rejected this claim, finding that lawmakers were attempting to address the rampant misclassification of employees and to ensure that workers received the "basic rights and protections they deserve under the law, the attendant problems, such as a lack paid sick leave, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave."
Judge Gee ruled that Uber and Postmates did not prove that app-based companies were targeted because of animus, reasoning that AB5 maintains the traditional exemption of workers who have long been considered independent contractors under California law.
Earlier this month, the California Legislature revised AB 5 to exempt several more businesses from the classification test and to increase the state’s ability to enforce the law. Meanwhile, Uber, Lyft and other app-based companies have poured millions of dollars into Prop 22, a measure on the November ballot that would exempt their drivers from AB5 and classify them as independent contractors.
If you believe you have been misclassified as an independent contractor instead of an employee, contact Teukolsky Law today for a free consultation.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.