Posted by 06 November 2020
California legislators wanted to classify contractors for Lyft and Uber as “employees.” But California voters disagreed, voting in favor of an initiative that allows these workers to continue being classified as independent contractors.” Some see this as a victory for worker freedom, while others contend that it will allow these companies to continue exploiting drivers.
Over 58% of voters approved Proposition 22, which changed California law to allow app-based drivers to be classified as independent contractors. This was in response to the enactment of AB 5 in California. That law put severe restrictions on how companies could use independent contractors, including drivers for Uber and Lyft. Supporters said it was necessary to crack down on unscrupulous companies that were trying to avoid paying workers benefits and higher wages. Opponents countered that it was the government meddling in arrangements that worked well for both employees and contractors.
Uber and Lyft strongly supported Proposition 22, saying that it was necessary for them to continue operating in the sate. Besides removing app-based drivers from AB 5’s restrictions, Proposition 22 also:
- Required app-based driving services to pay certain minimum amounts to drivers
- Imposed limits on the number of hours an app-based driver could work in a 24-hour period
- Mandated health care subsidies for some app-based drivers
- Required companies provide some forms of insurance for these drivers
AB 5 only affected drivers for companies like Uber and Lyft. Other independent contractors are unaffected. After AB 5 was enacted, businesses began restructuring or ending their relationships with California independent contractors.
To amend Proposition 22 will take a ⅞ vote in both chambers of California’s legislature.
Do you think that states should impose more restrictions on companies using independent contractors?