Ever since the start of the debacle that has become a bitter pill to swallow for many Uber and Lyft drivers in California, a controversial ballot initiative that became law is in the news again. Many regarded Proposition 22 as a compromise that created an exception to state law regarding employment classification in order to accommodate the wishes of the two rideshare services, who threatened to leave the state. It passed by a clear majority last year.
But a California Superior Court judge recently ruled that Prop. 22 is both unconstitutional and unenforceable. Under current state law, any worker, including gig workers, potentially falls under classification as an employee and thus enjoys benefits such as minimum wage, sick leave, unemployment and worker’s compensation. Prop. 22 essentially created a third classification for gig workers that allowed them some benefits, but not employee benefits.
In the ruling, the judge found that as written, the law prevents the State Legislature from making workers eligible for worker’s compensation, which violates California’s Constitution. Gig workers in other states will be watching how this case develops, as gig economy companies are pursuing similar goals in Massachusetts.
Employment classifications in California
Under current California employment law, any worker who accepts employment in the state is regarded as an employee with access to the benefits that are part of that classification, unless the employer can prove otherwise. In order to do this, the employer must be able to prove:
- that the worker operates independently of the control or direction of the hiring entity while they are working
- that the worker also is performing work outside of the business’s operations or schedule
- that the worker also has an independent business, occupation or trade
Employment misclassification is an increasingly common problem across the country, as it allows employers to avoid paying unemployment, social security and other taxes, as well as having to cover their workers compensation or unemployment insurance. Even though the practice is illegal, the penalties are relatively light and many employers are able to reach a settlement on the plea that the misclassification was unintentional.
The effect of misclassification on the employee, however, can be serious, as they are working without the legal protections to which they are entitled. For residents of Southern California, it is important to get the information you need to fight for your rights if you are experiencing employment misclassification, wage theft or discrimination.