Controversy surrounds California law regarding “gig workers,” who often work for app-based services such as ride-sharing and food delivery companies. Questions focus on whether the workers are independent contractors or employees. The classification factors into whether someone receives health insurance, workers’ compensation benefits and more. An August 2021 court decision may shake up the current gig economy landscape in the Golden State.
California law and independent contractors
Accusations suggest that some employers establish rules for independent contractors to avoid following mandatory California employment laws. The California legislature attempted to address controversies surrounding the abuse of independent contractor status by employers.
Lawmakers in California passed legislation that tightened independent contractor delineations. Uber filed lawsuits to counter the legislation and promoted a ballot initiative dubbed Proposition 22. Voters supported Prop 22, but a judge ruled against it.
Proposition 22 and the gig worker economy
The presiding judge ruled Proposition 22 unconstitutional. Essentially, the decision noted that the law tied the hands of future legislatures regarding app-based drivers while limiting the legislature’s ability to write, amend or pass laws related to workers’ compensation.
Proposition 22 contained language that required the legislature to achieve a “seven-eighths vote” to make any amendments. The judge found that provision intolerable and unconstitutional.
Classifying independent contractors
Misclassification remains a problem in California and elsewhere. Statutes establish a clear distinction between employees and independent contractors, but some companies try to ignore the law. Employers skirting the law could deny workers overtime, fair wages and workers’ compensation claims.
Ride-sharing and food delivery drivers don’t always worry about their classification status since they may work part-time or prefer flexibility. Others feel cheated out of benefits and find that company rules take away from independent contractor status. Wide disagreements over Prop 22 may further fuel controversy surrounding this issue.