What does the CA’s Prop 22 being unconstitutional news mean?
In one word: nothing.
The authors of Prop 22 created this proposition as the gig economy’s response to the California Legislature after it passed AB5. AB5 then became law in January 2020. AB5 sought to make classifying workers as independent contractors more difficult in California. One could perceive AB5 as California’s attempt to destroy the rights of hundreds of thousand of individuals desirous of enjoying the operational and economic freedom offered to them by app-based platforms.
Prop 22, a California November 2020 ballot measure, passed with 58% of the vote. The passage allowed app-based platforms to classify their gig worker users as independent contractors. Furthermore, this also gave the state little recourse to stop them.
What Is Currently Happening With Prop 22?
Firstly, prop 22 was challenged as unconstitutional. The Service Employees International Union and a Superior Court Judge agreed that the new law was indeed unconstitutional. According to them, the passage of Prop 22 prevents the legislature from regulating gig companies for the purposes of Workers’ Compensation.
As usual, there is no shortage of sensationalized headlines implying doom for the gig economy in California.
The framers of Prop 22 know the new law will continually be challenged if passed. Nearly all propositions that require signature gatherings are challenged upon passing. Ultimately, this is nothing new. In the next 12-18 months, the gig economy and California will continue their decade-long heated battle over the future of gig work. The California Supreme Court will ultimately decide whether Prop 22 will remain the law of the land or not.
There Is Hope.
The legal minds behind the drafting of Prop 22 fully anticipated a challenge prior to the last election. However, they are confident it will remain law.
In the meantime, nothing will change. Uber, Doordash, and the many thousands of entrepreneurial drivers expect to win a stay of Prop 22 within a few weeks pending the appeals process.
Lastly, for information on Prop 22, AB5, or any other 1099 issues, please contact DDI today.
About Delivery Drivers, Inc.
Delivery Drivers, Inc. (DDI) was founded in 1996 and is a third-party administrator with a singular focus – to bring Human Resource and Driver Management solutions for business owners operating with independent contractors. DDI’s mission is to serve, provide advocacy and leadership to independent contractors in the global gig economy. DDI’s business model helps companies find and onboard top-quality independent contractors and assist with accounting and tax services – all while providing compliance and legal expertise.
For more information, visit: www.ddiwork.com