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Can App-Based Drivers be Independent Contractors?

For now, the answer is “yes.”  Several years ago, the California legislature passed Assembly Bill 5 (AB 5). AB 5 made it far more difficult for businesses to classify workers as independent contractors. Thereafter, with huge financial support from Uber, Lyft, DoorDash and others Proposition 22 was placed on the California ballot and passed.

Prop 22 included new laws providing that App-Based Drivers (i.e. drivers for Uber, Lyft, Doordash and other companies that provide an application connecting passengers with drivers) could be characterized as independent contractors if specified requirements were met.  The requirements included limitations on control of the App-Based Drivers and required that such drivers receive benefits including accident insurance, health care subsidies and minimum earnings.

After passage of Prop 22, a group including the Service Employees International Union filed an action in Alameda Superior Court claiming that Prop 22 violated the California Constitution. The trial court found that Prop 22 did violate the law. The trial court ruling was then appealed by the State of California. On March 13, 2023, the Court of Appeal reversed the trial court ruling and found that the key provisions of Prop 22 were lawful.  So, for now Prop 22 remains the law and App-Based Drivers may be treated as independent contractors so long as the requirements of Prop 22 are satisfied.  Employers should definitely seek the advice of counsel in order to ensure you are properly classifying your workers and establishing the necessary documentation to support your decision on classification.  Contact the Employer Lawyers at Chauvel & Glatt to discuss your worker classifications and safeguard your business from misclassification lawsuits.

The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes.  For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500.


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