After an expensive legal battle, ride-hail companies like Uber and Lyft won a final victory when the California Supreme Court upheld a law that classifies gig workers as independent contractors and not employees. This makes gig workers ineligible for sick leave, overtime, and workers’ compensation.
The status of gig workers has long been contested. Though gig workers deliver food from restaurants, purchase and deliver groceries, and transport people to their chosen destination through apps owned by companies like Lyft and Uber, they are classified as independent contractors. Both companies have stated that they will leave any state that passes legislation reclassifying their drivers as employees. In California, Uber poured millions into electing Democrats who supported their point of view on the classification of gig workers.
In 2018, a Supreme Court ruling opened the door for a bill that would have forced the gig companies operating in California to reclassify the gig workers as employees, making them eligible for worker benefits.
The response from the ride-hail companies was to launch a 200 million dollar campaign to pass Proposition 22 in 2020. It was one of the most expensive and successful campaigns in history. The ballot measure passed by a wide margin and the new law made gig workers ineligible for workers’ compensation.
The Service Employees International Union and four gig workers challenged the new law in court. They argued that Proposition 22 was unconstitutional because it refused workers’ compensation to gig workers. Additionally, they claimed the Legislature’s power to administer workers’ compensation was undermined by the law which was passed by the initiative process.
Protect App-Based Drivers + Services, a coalition supported by the ride-hail companies, took the opposite position. They argued that the initiative process is equal in power to the Legislature.
The eventual ruling to uphold Proposition 22 was unanimous by the judges of the California Supreme Court.
The status quo of the gig workers’ classification as independent workers remains now that the matter has been settled. However, it was clear that the California Supreme Court anticipates the possibility of an initiative in the future that might threaten any law passed by the Legislature that would grant workers’ compensation to gig workers.
“We reserve these issues until we are presented with an actual challenge to an act of the Legislature providing workers’ compensation to app-based drivers,” the ruling stated.
The response from the SEIU was one of disappointment, but they vow to continue the fight for gig workers in California and their quest to receive employee benefits from the companies that own the apps.
“Prop 22 has allowed gig companies like Uber, Lyft, and DoorDash to deprive us of a living wage, access to workers compensation, paid sick leave and meaningful health care coverage,” California Executive Director Tia Orr said.
Meanwhile, the ride-hail companies are pleased with the ruling.
“The California Supreme Court ruling is an overwhelming victory for voters’ rights and the integrity of our state’s initiative system,” said Molly Weedn, the Protect App-Based Drivers + Services spokesperson. “The courts have spoken, and this issue can finally be put to rest.”
