CA Supreme Court Hearing Prop 22 Oral Arguments

The California Supreme Court heard oral arguments this past Tuesday in a case that could reshape the future of gig workers in the state and potentially impact how we engage with app-based services like ride-hailing and food delivery. The case revolves around Prop 22, a ballot measure passed four years ago that allowed companies like Uber, Lyft, and DoorDash to classify their workers as independent contractors rather than employees, circumventing the requirements of Assembly Bill 5 which aimed to classify them as employees. This distinction is crucial to these types of businesses, who argue classifying drivers as independent contractors provides flexibility, while in reality it circumvents workers compensation and employment laws, avoids taxes and shifts financial responsibilities and liabilities to the customers and the government.

Despite industry claims of providing flexibility, gig workers continue to struggle with low wages, and unsafe working conditions. The benefits touted by these companies for their independent contractors, such as guaranteed earnings and health care stipends, often fall short of meeting drivers’ needs, with many earning far less than advertised due to hidden costs and downtime between gigs.

The upcoming Supreme Court decision will focus on whether Prop. 22 violates the state constitution by limiting the legislature’s plenary power to create and enforce a complete system of workers’ compensation. The question of whether Prop 22 fundamentally undermines this system by removing app-based drivers and then establishing a new, privatized scheme that falls short of the basic features of a complete system of workers’ compensation must also be addressed. Prop 22 does not include health and safety provisions; it does not provide compensation provisions for permanent disability sustained by an app-based driver; and it lacks any provisions for an administrative body exercising judicial power to resolve disputes in an expeditious manner.

CAAA’s Amicus Committee members Andrew Lockard and Eric Overholt have submitted an amicus brief to the Supreme Court urging them to consider the ramifications of Prop 22 and the disruption it poses to the workers’ compensation system. In this brief, CAAA emphasizes the danger posed to workers as “Proposition 22, for the first time, seeks to subvert this system by reclassifying a wide swath of employees as independent contractors, thus barring eligibility for workers’ compensation. But more than a simple reclassification of 1.37 million workers for the employees to independent contractors, it supplants prescribed statutory benefits with lesser, contractual benefits that either omit or provide less extensive coverage.”

In the short run, they deny their drivers any access to Workers Comp when they have a car accident. In the long run, they don’t pay into Social Security and that means what you think it means… a shrinking monthly Social Security check for 1.5 million retirees. The outcome of this decision could set a precedent not only for California but also for the wider debate surrounding the gig economy and worker protections nationwide.