The election is a week away and in addition to choosing the next President, there are a number of important initiatives on the ballot including Proposition 22. Often referred to as the “Uber” or “Lyft” initiative given their financial support, this ballot measure will protect the unique work opportunity provided to millions of Californians through the gig economy. We have all seen the “Yes” and “No” commercials for Proposition 22, but here is what I know from my own personal experience in working on AB 5 when it was pending in the Legislature.
Maintaining Independent Contractor Status is the Only Way to Maintain Flexibility
One of the key differences between employees versus independent contractors is flexibility. While the “NO” side on Proposition 22 often claim there is no law that limits an employer’s ability to provide an employee similar flexibility, it just isn’t reality. A driver in the gig economy can literally choose to log on and off the platform whenever they want. Can you imagine if an employer said the same thing to all of its employees — just show up and stay for however long you feel like it? How would a coffee shop ensure that an employee was there at 4:00 a.m. to open the shop and make coffee for customers? How would a restaurant ensure that enough cooks were available to make all of the customer orders? It wouldn’t. And, while there is no state law in California prohibiting an employer from allowing employees to pick and choose when they show up to work, there are a number of laws that financially penalize an employer for employees who don’t work their full shift, employees who work two split shifts, employees who work too long, employees who work too many days, and even some localities penalize employers for not providing two weeks’ notice of an employee’s actual schedule.
Proposition 22 Provides Workers in the Gig Economy With a List of New Benefits
If Proposition 22 is successful, workers in the gig economy will be entitled to a list of new benefits including a minimum earnings guarantee that is 120 percent of the minimum wage, mileage reimbursement, a monthly healthcare subsidy, insurance to cover any injuries suffered while performing services, and protection against discrimination or harassment. While several of these benefits are the same as benefits received by an employee, a worker in the gig economy gets all of these benefits and still gets to maintain flexibility over their own schedule. Notably, employees are guaranteed no less than minimum wage, not 120 percent of the minimum wage and there is no requirement that an employee receive a monthly healthcare subsidy.
When working on AB 5 while it was pending in the Legislature, I recall talking with one driver who was a single mom with four children. She had limited time to work. Driving in the gig economy provided her the opportunity to earn money while her kids were at school and then at night while they were sleeping. I met another driver who was an older man who drove to earn extra income to supplement his pension so that he could afford to travel. He would work a few hours a week for several months, take off to go travel, and then come back and do it again. These two examples demonstrate the opportunity the gig economy provides for a diverse group of Californians with different needs that simply do not fit within the traditional notion of employment.
California needs to protect these work opportunities.
Jennifer Barrera, Executive Vice President, CalChamber
CalChamber members can read more about Independent Contractors in the HR Library. Not a member? See how CalChamber can help you.
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