Proposition 22, a ballot initiative passed in California's November 2020 state election, has been a lightning rod for debate surrounding worker classification and labor rights. Garnering 59 percent of the vote, the measure granted app-based transportation and delivery companies an exception to Assembly Bill 5 (AB 5) by classifying their drivers as independent contractors rather than employees. While proponents celebrate its preservation by the California Supreme Court, the law remains a contentious issue for workers, employers, and policymakers in San Francisco and beyond.
The Legal Journey of Proposition 22
The passage of Proposition 22 came after years of legal wrangling over the classification of gig economy workers. AB 5, enacted in 2019, aimed to establish stricter criteria for classifying workers as independent contractors, offering them the benefits and protections of employee status. Proposition 22 carved out an exception for app-based companies, a move upheld in a landmark California Supreme Court decision on July 25, 2024, in Castellanos v. State of California.
This ruling reversed earlier challenges, including Alameda County Superior Court Judge Frank Roesch's August 2021 decision that declared sections of Proposition 22 unconstitutional. While Judge Roesch's ruling cited violations of state constitutional provisions, a California State Appeals Court overturned this decision on March 13, 2023. The Appeals Court not only reaffirmed Proposition 22 but also affirmed drivers' rights to unionize and collectively bargain, a minor concession to labor advocates.
Pros and Cons of Proposition 22
Pros
Supporters of Proposition 22 argue that it benefits drivers and the gig economy as a whole by creating unique protections for gig workers:
- Flexibility for Drivers: Drivers retain the ability to set their own schedules and work on multiple platforms.
- Tailored Benefits: Drivers gain access to healthcare stipends and insurance coverage for injuries sustained while working.
- Preservation of the Gig Economy Model: The law enables app-based businesses to continue offering affordable and convenient services to customers.
Cons
However, opponents highlight significant drawbacks, particularly for workers:
- Denial of Employee Protections: Proposition 22 excludes drivers from benefits like paid sick leave, unemployment insurance, and overtime pay.
- Lower Benefits: The benefits provided under Proposition 22 fall short of those available to employees under California labor laws.
- Uncertain Wages: Critics argue that the law does not guarantee a true minimum wage, especially after accounting for job-related expenses such as vehicle maintenance.
- Barriers to Unionization: By classifying drivers as independent contractors, the law effectively hinders their ability to organize and collectively bargain.
What This Means for Workers in San Francisco
For San Francisco drivers, Proposition 22's continuation has far-reaching implications. While it secures their ability to work independently, it also reinforces a system where labor protections are minimal compared to traditional employment. San Francisco, a hub for the gig economy, faces the dual challenge of accommodating this new labor model while addressing the concerns of workers seeking fair treatment.
How Brothers Smith LLP Can Help
Navigating employment law in the wake of Proposition 22 is complex, particularly in San Francisco, where labor rights are a priority. If you are a driver affected by these changes or a business seeking compliance guidance, Brothers Smith LLP is here to help.
Our experienced San Francisco Employment Lawyers specialize in resolving disputes related to worker classification, wage and hour issues, and collective bargaining rights. Whether you're an app-based worker seeking clarity on your rights or an employer aiming to comply with Proposition 22, our team provides tailored solutions to meet your needs.