Proposition 22

Proposition 22. It was a 2020 ballot initiative in the U.S. state of California that created an exemption to Assembly Bill 5 for app-based transportation and delivery companies. The measure was passed by voters and classified drivers for companies like Uber, Lyft, and DoorDash as independent contractors, not employees, while providing them with certain alternative benefits. Its passage was a major victory for the gig economy industry but faced immediate legal and constitutional challenges.

Background and legislative context

The initiative emerged from a multi-year legal and legislative battle over the employment classification of workers in the gig economy. In 2018, the California Supreme Court established the strict "ABC test" for determining employee status in its landmark decision, Dynamex Operations West, Inc. v. Superior Court. The California State Legislature subsequently codified this test into law with Assembly Bill 5, authored by Lorena Gonzalez Fletcher. This legislation mandated that companies treat many independent contractors as employees, entitled to benefits like minimum wage, overtime, and workers' compensation. In response, major technology companies formed the coalition Yes on 22 and funded a record-setting campaign to place an initiative on the 2020 ballot, seeking a statutory exemption for their drivers.

Provisions of the measure

The measure enacted the Protect App-Based Drivers and Services Act. Its core provision defined app-based drivers as independent contractors, not employees or agents, if the hiring entity did not control their work and the driver performed work outside its usual course of business. In exchange, it mandated several alternative benefits: a guaranteed earnings floor based on engaged time, a healthcare stipend based on hours driven, occupational accident insurance, and a policy against discrimination and sexual harassment. It also required companies to implement safety protocols, including zero tolerance policies for alcohol and drugs, and conduct criminal background checks. The law specified that its provisions could only be amended by a supermajority vote of the legislature.

Support and opposition

The campaign in support, Yes on 22, was funded overwhelmingly by Uber, Lyft, DoorDash, Instacart, and Postmates. Supporters argued it preserved flexible work for drivers, provided new benefits, and maintained service reliability for consumers. Notable endorsements came from the California NAACP and some driver groups. The opposition campaign was led by labor unions, including the Service Employees International Union and the California Labor Federation, along with Democratic leaders like Vice President Kamala Harris and Senator Bernie Sanders. Opponents contended it created a "underclass" of workers denied full employee protections and represented a corporate takeover of labor law.

Legal challenges and implementation

Implementation was immediately challenged in court. In August 2021, a Superior Court judge in Alameda County ruled the measure unconstitutional and unenforceable, citing its limitation on the legislature's power to grant workers collective bargaining rights. This ruling was appealed by the state and industry groups. In March 2023, a three-judge panel of the First District Court of Appeal reversed the lower court, upholding the law. The opposition, led by the Service Employees International Union, sought review from the California Supreme Court, which declined to hear the case in June 2023, allowing the appellate ruling to stand and the law to remain in effect.

Impact and legacy

The passage marked a significant precedent for the gig economy, demonstrating the political power of technology companies to shape labor law via direct democracy. It influenced similar legislative efforts in other states, such as Massachusetts and Washington. The model of providing limited, portable benefits while maintaining contractor status has been debated as a potential "third way" for worker classification. However, it also intensified debates over the role of money in politics, as the campaign became the most expensive in California history. The legal affirmation of its provisions has solidified the employment model for app-based drivers in California, though ongoing advocacy by labor groups continues to seek broader employee reclassification.