California voters spoke loud and clear in November’s election — workers in the gig economy should remain independent contractors. The state’s Proposition 22 passed with nearly 59% of the vote, according to Ballotpedia.
The decision represents a major victory for Uber, Lyft, and other companies that operate in the gig economy. They will not be required to classify their workers as full-time employees and provide benefits like health insurance and paid time off. Proposition 22 is a repudiation of California law AB5, which passed in 2019 and said gig economy employees must be classified as workers who are entitled to benefits.
Uber and Lyft, along with companies like DoorDash and Instacart, spent $188 million to build support for the measure through the “Yes on 22” campaign. That money was spent to reinforce the notion that drivers could benefit from the independence and flexibility that came from remaining gig workers, as opposed to full-time employees.
“Despite all our efforts, at the end of the day our messaging was drowned out by the campaign’s massive spending,” Steve Smith, a spokesman for the California Labor Foundation, told The Guardian. “They have extraordinary resources that they’ve indicated that they’re willing to utilize in other states outside of California, which is a huge concern.”
The “Yes on 22” message came through loud and clear for Karen Pyatt, who works as an Instacart shopper while her husband drives for Uber and Lyft. Both are retired and enjoy the freedom to earn extra income by working hours of their choice.
“It’s major that we have this flexibility to work where and when we want to,” Pyatt told CBS News. “I don’t really want to be on a set schedule unless it’s a schedule I pick, especially after doing government work for 30 years.”
California is the first state to take a definitive stance on the gig economy, but other states could soon take up the issue. Before COVID-19 hit, New Jersey and New York were both considering measures similar to California’s AB5.
“It is exploitive, abusive, it’s a scam, it’s fraud,” Cuomo said in his 2020 State of the State address. “It must stop and it has to stop here and now!”
However, given how COVID-19 has stressed the U.S. economy, it’s unclear where those measures will go moving forward. Still, Erin Hatton, a labor law expert at the University of Buffalo, said other states would look to California for a roadmap of how companies and voters feel about the gig economy and related issues.
“California is a huge and influential state,” Hatton told NBC News. “These tech companies, many of them originated there, it’s kind of seen as the vanguard of this whole sector. And they’re literally rewriting employment law, and not just for themselves, but I think that lots of other companies will see this and try to follow suit.”
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