Exempts App-Based Transportation and Delivery Companies From Providing Employee Benefits to Certain Drivers
initiative statute
Official Summary
Classifies app-based drivers as "independent contractors," instead of "employees," and provides independent-contractor drivers other compensation, unless certain criteria are met.
Fiscal Impact: Minor increase in state income taxes paid by rideshare and delivery company drivers and investors.
support: $188,937,777 - Lyft, Uber, Doordash, Instacart, Postmates
oppose: $15,896,808 - unions
Notes
Recently the CA Legislature passed AB5 which requires companies and non profits to classify workers as employees instead of independent contractors, including paying employee benefits. To remain an independent contractor, an individual must pass the following 3 tests:
The worker is free to perform services without the control or direction of the company.
The worker is performing work tasks that are outside the usual course of the company’s business activities.
The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
It has a significant impact in a number of industries. This proposition is the rideshare industry’s answer to it. The proposition specifies that the rideshare gig workers are independent contractors and not employees. It also includes:
Earnings Minimum (120% of the local minimum wage), a Health Insurance Stipend for drivers who normally work more than 15 hours per week, companies will pay for medical costs and some lost income replacement when a driver gets hurt on the job, prohibits drivers from working more than 12 hours in a 24-hour period for a single rideshare or delivery company, prohibits workplace discrimination and requires that companies: (1) develop sexual harassment policies, (2) conduct criminal background checks, and (3) mandate safety training for drivers. Also, it limits the ability of local government to set additional rules.
AB 2257 was passed in Sept 2020 exempting certain workers from AB5, but not rideshare workers: still and video photographers and editors, freelance writers, content contributors, editors, translators, fine artists, and musicians under written contracts. Also, people who provide underwriting inspections and other services for the insurance industry, a manufactured housing salesperson, subject to certain obligations, people engaged by an international exchange visitor program, as specified, consulting services, animal services, competition judges with specialized skills, licensed landscape architects, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators.