Proposition 22 comes off the back of California's recently enacted Assembly Bill 5 (AB5), in 2019. The enactment of AB5 in September of 2019 is to determine a worker's status as either an independent contractor or an employee, the presumption that a worker is an employee, rather than an independent contractor, unless the hiring business can prove each part of the ABC test. (A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) The person performs work that is outside of the usual course of the hiring entity's business, and (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. Proposition 22 would not completely eliminate the legal precedent set in AB5, but instead, would exempt app-based rideshare and delivery companies from needing to prove each part of the ABC test.
Specifics & Figures
Worker Employment Status: Proposition 22 would exempt app-based rideshare and delivery drivers from being categorized as employees.
Worker Protections: Independent contractors are not covered by various state employment laws – including minimum wage, overtime, unemployment insurance, and workers' compensation.
The fiscal impact of this ballot measure, as researched and analyzed by California's Legislative Analyst Office, concludes that. By approving Proposition 22, app-based rideshare and delivery companies will be able to hire more drivers as independent contractors while being able to charge lower fares and delivery fees. These lower fees will enable customers to take more rides and place more orders. Inevitably, increasing the app-based rideshare or delivery company's overall profits. Thus, making the app-based companies stock increase in value. Overall, the fiscal impacts of Proposition 22 would lead to a minor increase in state income taxes paid by rideshare and delivery company drivers and investors.
Supports of Proposition 22 explain that more than 80% of drivers work less than 20 hours a week, have other jobs or responsibilities, and can't work set shifts as employees. Additionally, Proposition 22 protects the ability of app-based drivers to choose to work as independent contractors with control over where, when, how long and for who they work. The proposition goes forward with establishing new benefits for app-based rideshare and delivery drivers like guaranteeing a minimum earning that amounts to at least 120% of minimum wage plus .30 cents per mile compensation towards expenses. Furthermore, Proposition 22 establishes a health care stipend equal to 100% of the average employer payment towards a Covered California Plan, which is around $367.00 per month to a driver on average.
Opponents of Proposition 22 argue that app-based companies have made billions are spending in the hundreds of millions to create a special law that will allow for further worker exploitation. 78% of these app-based rideshare and delivery drivers come from communities of color, and 70% work more than 30 hours a week. California law, as it currently stands, exemplified in Assembly Bill 5 (AB5), requires app companies to provide their drivers with basic benefits and protections - like paid sick leave and unemployment insurance. In order to circumvent these employment regulations, proponents of proposition 22 argue these billion-dollar companies are buying themselves a special exemption in the law to avoid ever having to pay their fair share to keep drivers safe on the job.
Endorsements In Support
Support for Proposition 22 comes from a collective Political Action Committee (PAC) comprising of such large-scale app-based rideshare and delivery companies such as, Uber Technologies, Inc., Lyft, Inc., DoorDash, Inc., Postmates Inc., and Maplebear Inc., DBA Instacart. [Website]
Endorsements Not in Favor
Opposition for Proposition 22 comes from various worker unions such as the International Brotherhood of Teamsters, SEIU-UHW West, Service Employees International Union, United Food & Commercial Workers Local 770, and United Food & Commercial Workers Western States Issues PAC. [Website]