{"id":2297,"date":"2021-01-26T06:00:00","date_gmt":"2021-01-26T06:00:00","guid":{"rendered":"http:\/\/www.uniontrack.com\/blog\/?p=2297"},"modified":"2021-02-19T21:13:28","modified_gmt":"2021-02-19T21:13:28","slug":"prop-22-american-workers","status":"publish","type":"post","link":"https:\/\/uniontrack.com\/blog\/prop-22-american-workers","title":{"rendered":"Contractor or Employee? What California&#8217;s Prop 22 Could Mean for American Workers"},"content":{"rendered":"\n<p>Ken Green<br>CEO &amp; Founder<br><a href=\"https:\/\/www.uniontrack.com\/\">UnionTrack<\/a><\/p>\n\n\n\n<p>Since their inception, companies like Uber and Lyft have classified their U.S.-based workers as independent contractors, thereby denying them access to basic labor protections.&nbsp;<\/p>\n\n\n\n<p>The workers argue they should be classified as employees who are granted those basic rights. Driven by this conviction, workers have brought numerous lawsuits against gig companies in states across the U.S. over the past few years, with mixed results.&nbsp;<\/p>\n\n\n\n<p>Those charged with making policy decisions on the matter contend the struggle is due to the unique nature of work in the gig economy, which has made it difficult to form a consensus on the issue.&nbsp;<\/p>\n\n\n\n<p>This is a battle that has the potential to reshape the American labor movement. That\u2019s why it\u2019s worth watching state-level developments.<\/p>\n\n\n\n<p>In California, during the November 2020 election, voters ultimately denied gig drivers in the state the right to be classified as employees when they voted against Proposition 22.&nbsp;<\/p>\n\n\n\n<p>Here\u2019s what you need to know about California\u2019s Prop 22, and what that ballot initiative could mean for workers across the country.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Gig Worker Classification Battle in California<\/h2>\n\n\n\n<p>Drivers and other gig workers, with the support of numerous public officials, have been steadily taking small steps to win the right to be classified as employees in California.&nbsp;<\/p>\n\n\n\n<p>Progress was made in 2018 with a victory in the <a href=\"https:\/\/law.justia.com\/cases\/california\/supreme-court\/2018\/s222732.html\" target=\"_blank\" rel=\"noreferrer noopener\">Dynamex Operations West, Inc. v. Superior Court of Los Angeles<\/a> case. That ruling set a new, more rigid <a href=\"https:\/\/www.uniontrack.com\/blog\/dynamex-decision\">ABC-test standard<\/a> for classifying workers in California as independent contractors and placed the burden of that classification on employers, who had to assess whether a worker:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Is free from the direction and control of the hiring company.<\/li><li>Performs work outside of the company\u2019s normal scope of operations.<\/li><li>Is engaged in an independent trade of a nature similar to that of the hiring company.<\/li><\/ul>\n\n\n\n<p>In other words, if the company has control over how workers perform tasks or if tasks are a routine part of the company\u2019s core business, the company has to classify the worker as an employee, explains <a href=\"https:\/\/thehill.com\/policy\/technology\/496215-california-ag-sues-uber-lyft-over-employee-classification\" target=\"_blank\" rel=\"noreferrer noopener\">Chris Mills Rodrigo<\/a>, staff writer for The Hill.&nbsp;<\/p>\n\n\n\n<p>The ABC standard set in the Dynamex decision went into effect as California Assembly Bill 5, or AB 5, on January 1, 2020. Uber and Lyft have pushed back, Rodrigo notes, by claiming their core business is technology, not rides. That resistance prompted numerous lawsuits.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">California Attorney General Sues Uber and Lyft<\/h3>\n\n\n\n<p>In May, California Attorney General Xavier Becerra and various city attorneys sued the rideshare companies over the misclassification of employees as independent contractors.&nbsp;<\/p>\n\n\n\n<p>\u201cCalifornians who drive for Uber and Lyft lack basic worker protections,\u201d <a href=\"https:\/\/www.theverge.com\/2020\/5\/5\/21248347\/california-uber-lyft-attorney-general-independent-employees\" target=\"_blank\" rel=\"noreferrer noopener\">Attorney General Becerra<\/a> said at the time. \u201cSometimes it takes a pandemic to shake us into realizing what that really means and who suffers the consequences.\u201d<\/p>\n\n\n\n<p>The lawsuit alleged drivers have been denied benefits and protections \u2014 minimum wage, overtime pay, paid sick leave, access to unemployment and disability insurance \u2014 through their classifications as independent contractors.&nbsp;<\/p>\n\n\n\n<p>In the suit, the plaintiffs sought a preliminary injunction to force the companies to abide by AB 5 rules on classification, as well as restitution and civil penalties against the companies, CNBC\u2019s <a href=\"https:\/\/www.cnbc.com\/2020\/05\/05\/california-ag-cities-sue-uber-and-lyft-over-worker-classification.html\" target=\"_blank\" rel=\"noreferrer noopener\">Lauren Feiner<\/a> reported in May.<\/p>\n\n\n\n<p>It was a key moment for workers who, until then, were struggling to have their voices heard.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.prnewswire.com\/news-releases\/teamsters-union-applauds-california-attorney-generals-lawsuit-against-uber-and-lyft-301055004.html#:~:text=International%20Brotherhood%20of%20Teamsters&amp;text=WASHINGTON%2C%20May%207%2C%202020%20%2F,their%20employees%20as%20independent%20contractors.\" target=\"_blank\" rel=\"noreferrer noopener\">Randy Cammack<\/a>, president of Teamsters Joint Council 42, also applauded the efforts of the plaintiffs to stand up for workers: \u201cWe&#8217;re extremely pleased that this lawsuit was filed by Attorney General Becerra and city attorneys against Uber and Lyft to protect workers who are illegally subjected to and harmed by misclassification.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">California\u2019s Labor Commissioner Files More Lawsuits Against the Companies<\/h3>\n\n\n\n<p>A few months later, in August, California\u2019s labor commissioner filed class-action lawsuits against Uber and Lyft, alleging wage theft by the companies when classifying drivers as contractors.&nbsp;<\/p>\n\n\n\n<p>These lawsuits were similar to that of Attorney General Becerra, except they went one step further by seeking the recovery of unpaid wages and other monies in addition to the penalties for violations of state labor laws, CNN\u2019s <a href=\"https:\/\/www.cnn.com\/2020\/08\/05\/tech\/california-labor-commission-uber-lyft-wage-theft-suit\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">Sara Ashley O\u2019Brien<\/a> reported. The suits also sought to force the companies to start classifying their drivers as employees based on the standard set in AB 5.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.drivers-united.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Rideshare Drivers United<\/a> and the Transport Workers Union came out in support of the additional legal actions against Uber and Lyft.&nbsp;<\/p>\n\n\n\n<p>\u201cThis lawsuit is happening because thousands of drivers in California have stuck together to fight for something better for our profession as app-based drivers,\u201d said <a href=\"https:\/\/drivers-united.org\/p\/labor-commissioner-sues-uber-lyft-for-wage-claims\" target=\"_blank\" rel=\"noreferrer noopener\">Nicole Moore<\/a>, an organizer for Rideshare Drivers United. \u201cThe reason the Commissioner is taking action is because the level of wage theft that Uber and Lyft have committed for years is an assault on the people of California. It has to stop.\u201d<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"800\" src=\"https:\/\/www.uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image1-4.jpg\" alt=\"Blue car with Uber and Lyft stickers on back windshield; Prop 22 and American workers concept\" class=\"wp-image-2300\" srcset=\"https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image1-4.jpg 1200w, https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image1-4-300x200.jpg 300w, https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image1-4-1024x683.jpg 1024w, https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image1-4-768x512.jpg 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Workers Win in the Courtroom<\/h2>\n\n\n\n<p>Workers achieved momentous victories in California courtrooms as judges sided with them.&nbsp;<\/p>\n\n\n\n<p>California Superior Court Judge Ethan Schulman issued a preliminary injunction in August ordering Uber and Lyft to abide by AB 5 and reclassify drivers from independent contractors to employees who are eligible for benefits. That ruling came with a 10-day stay during which the companies could file an appeal, which they did. But that didn\u2019t stop drivers and their advocates from celebrating what was definitely a victory.&nbsp;<\/p>\n\n\n\n<p>\u201cThis is a huge victory for workers and confirms what we already knew: Uber and Lyft have been breaking the law by misclassifying drivers in order to deny them fair wages and healthcare,\u201d Transport Workers Union President <a href=\"https:\/\/abcnews.go.com\/Business\/california-judge-orders-uber-lyft-classify-drivers-employees\/story?id=72302968\" target=\"_blank\" rel=\"noreferrer noopener\">John Samuelsen<\/a> said in a statement. \u201cDrivers everywhere are standing up to fight for their rights and the courts have taken their side in case after case.\u201d<\/p>\n\n\n\n<p>A California state appellate court unanimously upheld Judge Shulman\u2019s ruling. The decision reaffirmed the lower court\u2019s ruling that the companies would have to reclassify their drivers as employees.&nbsp;<\/p>\n\n\n\n<p>\u201cThis is a victory for the people of California and for every driver who has been denied fair wages, paid sick days and other benefits by these companies,\u201d said San Francisco City Attorney <a href=\"https:\/\/www.marketwatch.com\/story\/uber-and-lyft-lose-appeal-leaving-only-one-road-to-avoid-classifying-drivers-as-employees-in-california-11603413560\" target=\"_blank\" rel=\"noreferrer noopener\">Dennis Herrera<\/a> in a statement.<\/p>\n\n\n\n<p>The companies were given at least 60 days to appeal to the California Supreme Court. Looming before that deadline, however, was the November 4 election and Proposition 22.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Workers Lose at the Polls<\/h2>\n\n\n\n<p>In the runup to the November election, Uber, Lyft and other gig economy companies spent a record $200 million-plus on ads, emails and in-app notifications urging people to vote in favor of Prop 22, Los Angeles Times reporters <a href=\"https:\/\/www.latimes.com\/business\/technology\/story\/2020-11-13\/how-uber-lyft-doordash-won-proposition-22\" target=\"_blank\" rel=\"noreferrer noopener\">Suhauna Hussain, Johana Bhuiyan and Ryan Menezes<\/a> write.&nbsp;<\/p>\n\n\n\n<p>Prop 22 explicitly asked Californians whether they would prefer to identify \u201cdrivers for app\u2011based transportation (rideshare) and delivery companies as \u2018independent contractors,\u2019 not \u2018employees.\u2019\u201d<\/p>\n\n\n\n<p>This ballot initiative was the companies\u2019 best chance at sidestepping the court rulings and continuing to operate as they had been, classifying drivers as independent contractors.&nbsp;<\/p>\n\n\n\n<p>The move worked. Fifty-eight percent of voters said yes to Prop 22, effectively exempting app-based employers from the constraints of AB 5.&nbsp;<\/p>\n\n\n\n<p>\u201cThis evisceration of wage and labor protections in the gig economy is a grave threat to workers\u2019 rights to earn a decent living, and safe and healthy working conditions,\u201d <a href=\"https:\/\/www.hrw.org\/news\/2020\/11\/09\/joint-statement-passage-californias-prop-22-devastating-blow-rights-app-based#\" target=\"_blank\" rel=\"noreferrer noopener\">Human Rights Watch<\/a> and Amnesty International asserted in a joint statement on the passage of Prop 22.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"800\" src=\"https:\/\/www.uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image2-4.jpg\" alt=\"Wide angle view at polling station on election day, focus on two people in voting booths; Prop 22 and American workers concept\" class=\"wp-image-2301\" srcset=\"https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image2-4.jpg 1200w, https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image2-4-300x200.jpg 300w, https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image2-4-1024x683.jpg 1024w, https:\/\/uniontrack.com\/blog\/wp-content\/uploads\/2021\/01\/image2-4-768x512.jpg 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">How Prop 22 Motivates Labor Efforts in Other States<\/h2>\n\n\n\n<p>The victory of the tech companies in California is a red flag for gig workers across the country who deserve access to basic workers\u2019 rights.&nbsp;<\/p>\n\n\n\n<p>\u201cThe passage of Prop 22 \u2014 and similar measures across the country \u2014 could signal a tidal shift for millions of gig workers, some of whom have fought for better pay, benefits and the right to unionize,\u201d Washington Post reporters <a href=\"https:\/\/www.washingtonpost.com\/technology\/2020\/11\/17\/uber-lyft-prop22-misinformation\/\" target=\"_blank\" rel=\"noreferrer noopener\">Faiz Siddiqui and Nitasha Tiku<\/a> write.&nbsp;<\/p>\n\n\n\n<p>\u201cAll of us need to pay attention,\u201d Susan Hurley, executive director of non-profit coalition <a href=\"http:\/\/www.chicagojwj.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Chicago Jobs With Justice<\/a>, told Siddiqui and Tiku. \u201cWe see companies not wanting to go back to hiring full-time people. They want to have independent contractors, and that is true across the economy.\u201d<\/p>\n\n\n\n<p>To prevent the California vote from becoming a tidal wave across the country, labor unions like the Boston Independent Drivers Guild (BIDG) are stepping up their efforts to organize themselves around the issue of driver classification.&nbsp;<\/p>\n\n\n\n<p>\u201cWe need to engage many more drivers, raise more resources, hire professional organizers, build broad coalitions, and generally strengthen our \u2018subjective factor,\u2019 or our independent organization strength,\u201d writes the <a href=\"https:\/\/bidg.org\/2020\/11\/23\/what-prop-22-means-for-massachusetts-drivers\/\" target=\"_blank\" rel=\"noreferrer noopener\">BIDG<\/a>.&nbsp;<\/p>\n\n\n\n<p>In doing so, the guild says, labor organizations can try to harness public support in favor of drivers and other gig economy workers when similar measures appear on ballots in other states, which it undoubtedly will.&nbsp;<\/p>\n\n\n\n<p>\u201cThis was California\u2019s fight,\u201d says <a href=\"https:\/\/themarkup.org\/news\/2020\/12\/01\/prop-22-lyft-uber-gig-workers-battle\" target=\"_blank\" rel=\"noreferrer noopener\">Carlos Ramos<\/a>, a driver and organizer with Gig Workers Rising. \u201cNow this is America\u2019s fight.\u201d<\/p>\n\n\n\n<p>As unions ramp up their advocacy efforts in the fight to get drivers and gig workers classified as employees, a tool like <a href=\"https:\/\/www.uniontrack.com\/\">UnionTrack ENGAGE<\/a> can help leaders communicate with their members and keep them engaged.<\/p>\n\n\n\n<p><small><em>Images by: Piotr Adamowicz\/\u00a9123RF.com, unitysphere\/\u00a9123RF.com, seventyfour74\/\u00a9123RF.com<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With Prop 22 rideshare drivers and other gig workers in California ultimately lost the right to be classified as employees.<\/p>\n","protected":false},"author":3,"featured_media":2302,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[9],"tags":[],"class_list":["post-2297","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uniontrack-blog"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Contractor or Employee? 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