What California’s Gig Initiative Means For You?

November 12, 2020
Sacks & Zolonz, LLP
Workers' Compensation Defense

We have discussed California’s gig worker laws many times over the last few years, usually related to how worker classification impacts you as a business owner. Specifically, worker classification plays a major role in the benefits that you are required to provide an employee, including workers compensation benefits. When the California legislature passed AB 5 last year, they intended to give most contractors in the state employment designations, which would result in them having to be paid minimum wage, as well as having access to other benefits such as health care, unemployment, sick leave, and workers’ compensation. Now, California voters have overturned AB 5 with Proposition 22, which has once again changed the work landscape in this state.

What Does Proposition 22 Do in California?

Voters in California have decisively determined that AB 5 is not something they have an interest in continuing. Various gig companies, particularly Uber and Lyft, worked very hard to defeat AB 5 at the ballot box this year. Proposition 22, according to a Washington Post story, firmly cements the ability of companies to use workers as independent contractors if that is beneficial for their business model. Most people are familiar with companies like Uber, Lyft, Instacart, DoorDash, and even Amazon using independent contractors, as opposed to employees, when it comes to handling the majority of their transportation and rideshare services.

Proponents of Proposition 22 say that these companies allow the workers to operate on a flexible schedule that suits their needs as opposed to working as employees with rigid schedules.

California voters usually support adding additional rights for workers (such as access to health benefits, overtime, and work injury protections), but Proposition 22 indicates that voters in this state generally understand that workers have the right to choose whether or not they want to work with a company that views them as independent contractors as opposed to full-fledged employees. The passage of this proposition means that the estimated one million gate workers in California will continue to operate as independent contractors.

Employers and many gig workers themselves have argued that AB 5 was not a well-written law. In particular, people took aim at the seemingly arbitrary rules in place designed to exempt some gig workers and not others.

Call Us For a Review of Your Situation Today

If you use independent contractors as an employer, then we know you have worked hard to understand how AB 5 affected your business over the last year. Now, Proposition 22 has completely changed the workplace landscape once again in this state.

If you are a business owner or operator and have any questions related to the benefits that you need to pay your employees or contractors, particularly concerning workers’ compensation, contact the team at Sacks & Zolonz, LLP today. We have extensive experience helping employers in and around the Los Angeles area ensure that they are following the ever-changing state laws regarding workers’ compensation. You can contact us for a consultation of your case by clicking here or calling 310-216-7778.

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