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California Proposition 22 (Prop 22) Definition

What Is Proposition 22 (Prop 22)?

Table of Contents

California Proposition 22 (Prop 22), formally generally known as the “App-Primarily based Drivers as Contractors and Labor Insurance policies Initiative,” was accepted by California voters within the Nov. 3, 2020, basic election. Prop 22 defines app-based transportation and supply drivers as impartial contractors and likewise adopts sure labor and wage insurance policies that apply solely to app-based drivers and to corporations akin to Uber, Lyft, and DoorDash.

On Aug. 20, 2021, Alameda County Superior Courtroom Decide Frank Roesch dominated that two sections of Proposition 22 have been unconstitutional and that the measure as an entire was unenforceable. Nevertheless, it stays in impact whereas its proponents enchantment Decide Roesch’s ruling.

Key Takeaways

  • California Proposition 22 (Prop 22) is a state regulation that lets corporations classify rideshare and supply drivers as impartial contractors whereas offering them with sure advantages in the event that they meet work-hours standards.
  • Handed Nov. 3, 2020, Prop 22 was designed to counter California Meeting Invoice 5 (AB5) that mandated gig employees be categorised as workers; main sponsors included Uber, Lyft, and DoorDash.
  • Proponents of Prop 22 tout the flexibleness offered to drivers, together with advantages and safety.
  • Opponents of Prop 22 say the advantages and safety are insufficient.

Understanding California Proposition 22 (Prop 22)

Along with mandating that app-based drivers be thought-about independent contractors, Prop 22 consists of labor and wage insurance policies particular to those employees and the businesses they work for, since impartial contractors aren’t lined by state labor legal guidelines. These insurance policies embrace the next necessities:

  • Funds to drivers for the distinction between their net earnings, excluding ideas, and a internet earnings flooring based mostly on 120% of the state minimal wage for hours labored plus 30 cents per engaged mile, adjusted for inflation after 2021;
  • Twelve-hour work restrict throughout a 24-hour interval until the driving force has been logged off for an uninterrupted 6 hours;
  • Firm-provided healthcare subsidies equal to 82% of the common California Coated (CC) premium every month for drivers who common at the very least 25 work hours per week throughout a calendar quarter;
  • Firm-provided healthcare subsidies equal to 41% of the common California Coated (CC) premium every month for drivers who common between 15 and 25 work hours per week throughout a calendar quarter;
  • Firm-provided occupational accident insurance coverage for at the very least $1 million in medical bills and misplaced revenue ensuing from accidents suffered whereas the driving force is on-line and obtainable to obtain service requests;
  • Disability funds equal to 66% of a driver’s common weekly earnings through the earlier 4 weeks earlier than lined accidents, for as much as 104 weeks;
  • Firm-provided unintended dying insurance coverage for the good thing about driver’s partner, youngsters, or different dependents when driver dies whereas utilizing the app;
  • Firm-developed anti-discrimination and sexual harassment insurance policies; coaching applications for drivers associated to driving, visitors, accident avoidance, and recognizing and reporting sexual assault and misconduct; zero-tolerance insurance policies for driving below the affect of medication or alcohol; and required prison background checks for drivers.

Prop 22 additionally criminalizes the impersonation of an app-based driver as a misdemeanor.

Passage of the Prop 22 initiative reverses the affect of California Meeting Invoice 5 (AB5), signed into regulation by Governor Gavin Newsom on Sept. 18, 2019, and a subsequent courtroom order Aug. 10, 2020, by California Superior Courtroom Decide Ethan Schulman that required rideshare and supply corporations to reclassify drivers as employees.

Forces Behind the Prop 22 Marketing campaign

Handed in 2019, California Assembly Bill 5 (AB5) required corporations that rent impartial contractors to reclassify them as workers. Three corporations—Uber, Lyft, and DoorDash—created an account on Aug. 30, 2019, to fund a poll initiative to counter AB5 particularly because it utilized to their drivers. That poll initiative, “Sure on Proposition 22,” was filed on Oct. 29, 2019. “Sure on Proposition 22” obtained $205.68 million. Uber contributed $59.5 million, DoorDash contributed $52.1 million, Lyft offered $49.0 million, Instacart offered $31.6 million, and Postmates offered $13.3 million.

The opposition, “No on Prop 22,” obtained $20.46 million. Main contributors included: SEIU Native 721, the Worldwide Brotherhood of Teamsters, the California Labor Federation, SEIU Native 1021, SEIU-UHW West, UFCW Worldwide Union, and UFCW Native 770, every of which put in $1 million or extra.

Execs of Prop 22

Through the marketing campaign proponents of Prop 22 spelled out some great benefits of the proposal for drivers, the businesses they work for, and the group at giant:

  • Protects driver option to be an impartial contractor and work their most popular schedule.
  • Lets corporations provide rideshare and supply providers at an affordable value.
  • Saves hundreds of jobs that might be misplaced if corporations pulled out or decreased their workforce.
  • Supplies drivers with benefits and earnings ensures not beforehand obtainable to impartial contractors.
  • Strengthens public security via obligatory coaching applications.

58%

The share of the vote that Prop 22 gained within the California basic election in November 2020.

Cons of Prop 22

Opponents identified the downsides related to the passage of the proposal:

  • Denies drivers the fitting to be workers together with all advantages and protections provided to workers below state labor regulation.
  • Gives decrease advantages than these obtainable to workers.
  • Doesn’t present drivers with an precise assured minimum wage.
  • Incurs prices from its mandated advantages that would nonetheless elevate costs for the general public.
  • Eliminates the potential for union group and safety for employees.

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