On Friday, a California Superior Court judge held that California's Proposition 22--which allowed certain "gig economy" workers to be classified as independent contractors--is unconstitutional.
California voters passed the Proposition last November with an overwhelming majority, signaling their agreement with companies like Uber, Lyft, and DoorDash, that gig workers should be allowed to be classified as independent contractors rather than full employees. The ruling is the latest turn in a lengthy and expensive fight between gig-economy giants and the state of California.
California lawmakers, with the support of employee unions, have long pushed for independent contractors to be reclassified as employees. The state argues that employees receive greater benefits and protections from employment status, and that the workers often face no real choice of working status. Those who favor allowing the business and the worker to decide their own business relationship point out that the state is able to gather payroll taxes like social security and disability insurance from employees, but does not receive such up-front payments from independent contractors.
Ultimately, this ruling (which will be appealed) means the dust is not yet settled on the independent contractor fight. For most employers, however, the "gig economy" focus of Prop 22 meant that most independent contractor classifications would need to be reviewed and revised for legal compliance irrespective of Prop 22. For the gig economy, the fight continues.
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