California Approves Gig Economy ‘Contractor’ Vote

People in California have voted on Tuesday in the US presidential election, but have also voted as to whether ‘gig economy’ workers can retain their ‘contractor’ status.

Earlier this year lawmakers in California implemented a law (known as AB5), which sought to reclassify ride-hail, food delivery and other app-based workers as ’employees’ entitled to benefits such as unemployment insurance and minimum wage.

At the same time as people in the US state voted for their next president, the state also held a ballot known as Proposition 22 to repeal AB5, which will allow all California voters to decide about the rights of workers in the gig economy.

Proposition 22

Some Uber and Lyft drivers have supported this Proposition 22 ballot measure and others are opposing it.

Company wise, Uber and its fellow gig economy employers are supporting the ballot, which will decide on worker status as independent contractors, not employees.

And now it has emerged that Californian voters have backed these workers ability to remain as contractors and not employees, in a blow to state legislators.

Gig economy

The whole business model of the gig economy has vexed law makers for years now, with one side pointing to its flexibility allowing staff to decide when to work, whilst others push for these ‘contractors’ to be given the same rights to holiday and sick pay as conventional employees.

Officials in California sued Uber and Lyft in May for not complying with AB5.

In August the San Francisco Superior Court ruled that drivers for Uber and Lyft were employees, and not freelancers or contractors.

Almost immediately after that ruling, Uber CEO Dara Khosrowshahi threatened to temporarily shut down Uber’s service in California.

The CEO of Lyft issued a similar warning.

Legal action

Days later however, both Uber and Lyft were granted an emergency injunction by a court, so were able to continue operating as normal in California.

That injunction meant that drivers could continue working as independent contractors while the appeals court considered the question of driver status.

But in late October the Appeal Court in California ruled that the ride-hailing firms must reclassify their drivers in California as employees.

California’s vote is being closely watched and it could ripple into other US states, and into other parts of the world.

Indeed, other US states such as Massachusetts and New York are challenging gig companies’ labour policies.