In a win for Uber and Lyft, California passes Proposition 22

In a win for Uber and Lyft, California passes Proposition 22
Posted at 4:18 AM, Nov 04, 2020

Californians have voted to carve out specific gig workers from a state employment law about who is considered an employee and eligible for benefits.

That means people who drive for Uber and Lyft will remain classified as independent contractors and will not be eligible for employee benefits.

A California Supreme Court decision in 2018 created a strict test to decide whether a self-employed worker, like gig workers, should be considered employees.

In response to the ruling, lawmakers amended Assembly Bill 5 in 2019 to add additional professions where services could be provided by independent contractors, and would not necessarily be employees. However, no changes were made for app-based companies like Lyft, Uber and DoorDash.

The state law made app-based drivers employees, and would pay them for their time both while they are driving and they are waiting for a new ride, and offer employee benefits like paid sick leave and workers compensation for one-the-job injuries, theLos Angeles Times explains.

Since the proposition has passed, drivers will remain categorized as independent contractors, although the proposition includes wording to require companies to provide an hourly wage for time spent driving equal to 120% of minimum wage.

The language also gives drivers a stipend for purchasing health insurance coverage when their driving time averages at least 15 hours a week. However, only hours spent driving counts toward that total, not the time spent waiting between trips.

Proposition 22 was launched and partially funded by Lyft and Uber. Nearly $200 million was spent on the campaign for this proposition alone.