COMP NEWS – A California judge has ruled Prop 22, the tech industry ballot initiative that sought to exempt gig and app-dispatched workers from being classified as full-time employees, as unconstitutional. The ruling comes as a striking blow to tech giants that collectively spent over $200 million dollars laboring for the proposal last year.
Tech companies like Uber and DoorDash spent hundreds of millions of dollars to pass Prop. 22 after California’s state government enacted a law called AB5, which requires California employers to treat more workers as “employees” who are covered by state law requiring protections like overtime pay and worker compensation.
After failing to win a carveout from the state government, gig tech companies who rely on fleets of “independent contractors” launched a ballot initiative that exempted their drivers from the law, Jeremy reports. The ballot measure that was approved by California voters instead guaranteed workers a minimum wage based on driving time, a health insurance stipend and some compensation for on-the-job injuries, but it was a major blow to unions who argued AB5 was necessary to protect gig workers from exploitation and secure them more rights.
Tech giants such as Uber and Lyft will feel heavy ramifications if they have to reclassify the majority of their workforce as full-time employees with protections. Prop 22 was stuck down for a very specific reason:
Superior Court Judge Frank Roesch found that the ballot initiative’s 7/8ths threshold requirement for the California legislature to amend the law was unconstitutional because it “limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law.” And because that section is “not severable from the rest of the statute” Roesch said all of Prop 22 was unenforceable.
The fight isn’t over yet, as several app-based companies have signaled their attempt to appeal the decision. Until the measure has had its full day in court, Prop 22 will stay in effect, writes the San Francisco Chronicle.
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