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Proposition 22 is Struck Down: Are App-based Drivers Employees or Independent Contractors?

For those who do not recall, during the last election, California voters passed Proposition 22. Proposition 22 generally provided for independent contractor status for app-based driving providing the hiring entity met several requirements. For example, firms like Uber and Lyft under Proposition 22 were no longer required to classify their gig workers as an employee and could have their drivers maintain their independent contractor status.

However, recently, Alameda Superior Court Judge Frank Roesch overruled the vote by the people. Late Friday August 20, 2021, Judge Roesch issued an opinion that Proposition 22 is “unenforceable” and “unconstitutional” because, amongst other reasons, a section of Proposition 22 “limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law” and “is not severable” from the rest of the measure.

What does this mean for employers? It means that if Judge Roesch’s ruling holds, then gig economy workers may need to be classified as employees, regardless of if they prefer the freedom and flexibility of independent contractor status. However, there is no doubt that companies like Uber and Lyft, who spent considerable money helping pass Proposition 22, will challenge Judge Roesch’s ruling at California’s Appellate Court. However, justice moves slowly, and a decision on Proposition 22 and Judge’s Roesch’s opinion will not likely be received until 2022, at the earliest.

Chauvel & Glatt will continue to monitor Proposition 22 and provide you with updates on this important issue. In the meantime, it is never too late to make sure you have classified your employees, or independent contractors, correctly. Misclassification is costly to companies and a review of your workers is one key factor to avoid litigation. If you have any further questions on the status of your employee classifications in your workplace, contact the Employer Lawyers at Chauvel & Glatt.

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. (photo credit: 123rf.com)


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