Back in February, we covered California’s controversial Prop 22, a ballot initiative that restricted protections for app-based transportation and delivery companies that were originally granted by Assembly Bill 5. On August 20, 2021, Alameda County Superior Court Judge Frank Roesch weighed in, giving gig workers new hope after ruling that the bill was unconstitutional and no longer enforceable.
What is Assembly Bill 5?
Assembly Bill 5, which was signed into law in September 2019, codified the 2018 California State Supreme Court’s ruling in Dynamex Operations West, Inc. v. Superior Court. The Court in Dynamex established a three-prong test to determine whether a worker was an independent contractor or an employee. The three-prong test requires: (1) that the worker be free from the hiring entity’s control and direction in the performance of work; (2) that the worker is doing work that is outside the hiring entity’s usual course of business; and (3) that the worker is engaged in an established trade, occupation, or business of the same nature as the work performed. Only if all three questions are answered “yes” can a worker be properly classified as an independent contractor, which results in the hiring entity not having to provide the worker with unemployment insurance, workers compensation benefits, or other protections afforded to employees.
Assembly Bill 5 meant that workers within the gig economy – such as Uber and Lyft drivers – were in fact employees, and not independent contractors as they had been designated. As a result, this meant that the companies employing these individuals were required to extend benefits and other protections such as unemployment, minimum wage, sick leave, and worker’s compensation, that they previously weren’t eligible for.
What is Prop 22?
Beginning in August of 2019, even before Assembly 5 passed into law, DoorDash, Lyft, and Uber each invested nearly $30 million into lobbying efforts against the bill.. They eventually came out on top, after winning over 58% of the November 2020 vote. The passage of Prop 22 granted app-based transportation and delivery companies an exception to Assembly Bill 5 by classifying their drivers as independent contractors while affording their drivers the following protections: (1) 120% of the local minimum wage for each hour spent driving, but not waiting; (2) $0.30 reimbursement per mile driven with a passenger in the car; (3) health insurance stipend for any driver working an average of more than 15 hours per week; (4) medical costs and lost income for drivers who are hurt on the job while driving or waiting; and (5) prohibiting workplace discrimination by developing sexual harassment policies, conducting criminal background checks, and mandating safety training for drivers.
Prop 22 Ruled Unconstitutional
Drivers and the Service Employees International Union filed a lawsuit challenging the constitutionality of the law. And on August 20, 2021, the judge agreed with them. Judge Frank Roesch ruled that Prop 22 violated California’s Constitution because it restricted the Legislature’s ability from making gig workers eligible from workers’ compensation benefits, which is a right entitled to them by the state. Uber has already announced its intent to appeal the judge’s decision.
Contact Gokal Law
Are you a gig worker and feel that your employer may be treating you unfairly? Contact Jibit Cinar of Gokal Law Group, Inc. Our team specializes in litigation and counseling related to employment and labor law and will diligently represent you in the courts. In short, we will give you the support you need to win your case. The sooner you contact us, the more effective we are at getting you the justice you deserve.
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