In Castellanos v. California, (Cal., No. S279622, 7/25/24), a DECISION at the California Supreme Court this week was considered a victory for companies such as Uber, Lyft, and DoorDash. The court decided in a closely-watched challenge to the voter-passed law known as Proposition 22 that the law doesn’t wrongly curtail the legislature’s power over worker protections. But it’s not the end of the companies’ fight in the Golden State, reports Maia Spoto.
- Over a million gig workers in California might have become eligible to receive overtime pay, sick leave, and other employee benefits if the state’s top court ruled against the constitutionality of the provision. Prop. 22, passed in 2020, allowed the companies to classify drivers as independent contractors.
- The California Supreme Court upholds voter initiatives whenever possible, said David A. Carrillo, executive director of Berkeley Law’s California Constitution Center. Now, the fight moves to Sacramento, where app-based drivers are expected to press lawmakers to expand their protections.
- The California Legislature has the power to make exceptions extending workers’ compensation benefits to non-employees, Justice Goodwin H. Liu noted in the unanimous opinion.
The California Supreme Court explicitly left open the question of whether state lawmakers can extend the workers’ compensation system to include app-based workers, saying only that the voter amendment, known as Proposition 22, doesn’t unduly encroach on the legislature’s constitutional power to oversee that system. The court didn’t weigh in on the limits to the power of voters to legislate on workers’ compensation through California’s unique ballot initiative process, said David A. Carrillo, executive director of Berkeley Law’s California Constitution Center.
Normally, classifying a worker as an independent contractor would exclude them from receiving workers’ compensation benefits if they are injured on the job. But California lawmakers have made several exceptions to extend the system to non-employees, such as volunteers for private, non-profit organizations, Liu noted, declining to express a view on whether that route would be feasible here.
What is California Proposition 22?
California Proposition 22, also known as the App-Based Drivers as Contractors and Labor Policies Initiative, was a ballot initiative approved by voters in the November 3, 2020, election. This proposition allowed app-based transportation (rideshare) and delivery companies, such as Uber, Lyft, and DoorDash, to classify their drivers as independent contractors rather than employees.
Here are some key points about Proposition 22:
- Driver Classification: It exempted app-based transportation and delivery companies from Assembly Bill 5 (AB5), which was a California law that required companies to classify many workers as employees rather than independent contractors.
- Driver Benefits: Although classified as independent contractors, drivers were provided with certain benefits, including:
- An earnings guarantee of at least 120% of the minimum wage.
- A healthcare subsidy for drivers who worked a certain number of hours.
- Occupational accident insurance to cover on-the-job injuries.
- Compensation for vehicle expenses.
Work Flexibility: The proposition allowed drivers to maintain a flexible work schedule, a key argument used by the companies in favor of the proposition.