California Supreme Court Overrules State Democrats to Back Gig Workers

Pro-union Democrats in California have just hit a major setback after the state’s Supreme Court ruled in favor of gig workers.

The California Supreme Court ruled on Thursday to uphold Proposition 22.

Prop. 22 allows rideshare drivers like those from Uber and Lyft to remain contract employees rather than being forced to register as employees with benefits.

Passed Nov. 3, 2020, Prop. 22 was designed to counter California Assembly Bill 5 (AB5) that mandated gig workers be classified as employees; major sponsors included Uber, Lyft, and DoorDash.

AB5 was signed into law by Democrat Gov. Gavin Newsom in September 2019 and went into effect on Jan. 1, 2020.

The law required companies that hire independent contractors to reclassify them as employees, with a few exceptions.

The law was a disaster for an estimated one million gig workers in the state.

Aside from rideshare drivers, the law also heavily impacted truck drivers who own their own rigs and pick up jobs on a gig basis.

One major appeal of being a gig worker is the ability to choose when and when not to work.

As an employee, a former gig worker may lose that choice.

“Certain people are very attracted to this type of work and flexibility and will most likely drop out, as they may not like fixed schedules or other rules and requirements,” says Elliot Dinkin, president and CEO of Cowden Associates, a Pittsburgh-based consulting and actuarial firm.

Almost as soon as AB5 passed, Uber, Lyft, and DoorDash responded by heavily supporting California Proposition 22, a ballot initiative that legally designated drivers for app-based ride-hailing and delivery apps as independent contractors.

Thanks to their efforts to garner signatures, the measure got on the ballot in the November 2020 state general election.

Prop. 22 was approved, with the support of 58% of California voters.

The rule gave some limited benefits to contract employees but allowed them to remain employed on a contract basis.

However, a lower court ruled the Democrats’ AB5 law is unconstitutional and would have required major changes to the way rideshare and other companies that use gig workers operate.

The ruling was expected after the justices seemed to side with proponents of Prop 22 during a ruling in May.

The two sides have been fighting over the rule for years, but it has remained in effect during the fight.

Companies including Uber, Lyft, DoorDash, and other gig-based companies had threatened to shut down their operations in California if Prop. 22 was overturned.

That will not be necessary now.

Gig work is attractive for many who need a flexible schedule and those who need or want to work part-time.

It can work well for students, parents caring for young children, and disabled workers who have times when their health does not allow them to work.

“Today marks a historic moment and a landmark victory,” general counsel for Instacart Morgan Fong said in a statement Thursday.

“Instacart shoppers consistently and overwhelmingly tell us they value their flexibility and independence.

“The Court’s decision preserves access to the flexible earnings opportunities they want and the important benefits provided under Prop. 22.”

More than 1 million people drive for app-based companies in California and would have been impacted by striking down the rule.

The companies spent $200 million campaigning for Prop. 22 before it’s passing.

Uber spokesperson Zahid Arab said the decision “affirm[ed] the will of the nearly 10 million Californians who voted to deliver historic benefits and protections to drivers while protecting their independence.”

Arab referred to the original vote on Prop. 22, which was on the ballot in 2020.

Opponents of the rule tried to argue that the state constitution gave the legislature the exclusive right to determine rules for worker’s compensation in the state, but the judge rejected that argument.

READ MORE – Scientists Raise Alarm over California’s Geoengineering Efforts to Tackle ‘Global Warming’

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