California’s Prop 22 Concerning “Gig Economy” Drivers Ruled Unconstitutional by California Court

Written by Jeremy Mittman

The dust is nowhere near settled in the battle over independent contractors in California. In the latest development, a California Superior Court judge ruled last week that Proposition 22 is unconstitutional and unenforceable.

Prop 22, which was passed by California voters last November, allows certain “gig economy” workers (app-based delivery and transportation drivers) to be classified as independent contractors instead of employees, provided the employer adheres to several requirements for paying the workers and carrying appropriate insurance, etc.

Last week’s ruling is the latest development in the years-long fight over employee classification in California, previously covered on our blog here. California Superior Court Judge Frank Roesch ruled, in part, that Prop 22 is unconstitutional because it infringes on the state Legislature’s power to regulate worker’s compensation and is therefore unenforceable. The ruling will be appealed. The outcome of the appeal could set a national precedent as other states are in the process of introducing similar legislation.

Applicable gig economy companies will not have to immediately reclassify their workers, however, as Prop 22 will remain in effect for the time being, pending the outcome of the appeal. However, it bears mention that most California companies do not fall under the Prop 22 exemption and should review their independent contractor classifications (if any) for compliance with California law, if they have not already done so.

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