Prop 22 and What It Means for California App Based Drivers

By: Attorney Elena Fewell Howard

Here's the skinny. When California's AB-5 passed it required most gig workers (independent contractors) be reclassified as employees under a more stringent test. You see, misclassification of a worker as an independent contractor by a business when they really should be classified as an employee, carries with it stiff penalties per violation under the law. AB-5 exempted a few industries, lawyers being one. 

Food delivery drivers and ride hailing services were not included as exemptions which meant that they faced the higher scrutiny. In May of this year, the California Attorney General filed a lawsuit against Uber and Lyft for misclassifying their employees under the new law. Prior to this suit and having seen that AB-5 may pass, the ride hailing companies set aside funds for a ballot initiative - Prop 22 - to combat AB-5 as it pertained to their industries, namely app based ride hailing and delivery. They did this with the view that their contractors should remain classified as contractors and because they felt they should not face any violations based on this classification. Much to their delight Prop 22 was approved by the voters this month.

Prop 22 provides that app based drivers are independent contractors and sets forth labor and wage policies for app based drivers. These benefits are not the same as those that would be given to an employee, and are limited. Limited benefits include an earnings minimum, health insurance stipend, pay for costs for injuries sustained on the job, the prohibition of shifts longer than 12 hours in a 24 hour period, the prohibition of workplace discrimination, requirements for:  sexual harassment policies, criminal background checks, and safety training for drivers.

Supporters of prop 22 say that holding app based drivers exempt from AB-5 will allow for more availability of their services because the cost of acquiring said services is lower than if they were required to pay all the benefits of an employee. Also, app based drivers may choose when, where and how long they work which had they been classified as employees, they may have lost that flexibility. They also recognize how successfully these services (which often occur by contractors at all hours of the day), provide rides for inebriated passengers that may otherwise  drive intoxicated if less ride hailing drivers exist. 

Human Rights Watch and Amnesty International have recently released a statement with enumerated concerns about the impact of this exemption will have on gig workers rights. See statement here. Among those issues, the statement points to the large percentage of POC who work as app based drivers - 78% - and further states that factoring in wait time and drivers expenses, the drivers could earn less than $6 an hour. They go on to say "we urge the United States Congress and the United States Department of Labor to protect the rights of app-based workers, such as through legislative and regulatory action that helps ensure a living wage, paid sick and family leave, and workers’ compensation for illness and injury."

It remains to be seen if amendments will be made to the laws surrounding the classification of app based drivers or the benefits available to them or both. In the meantime, this Unicorn and her brethren urge app based companies - large and small - to be as equitable as possible with their drivers and expand said benefits as their profits increase. 

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