Judge Rules California Gig Worker Law Unconstitutional

On August 20th, 2021, a California Superior Court judge ruled that Prop 22, the California gig worker law is unconstitutional. Particularly, the 2020 ballot measure exempted ride-share and food delivery drivers from California state labor law, making them independent contractors. Earlier this year, the Department of Labor withdrew a pending federal independent contractor rule before it took effect.

Background on Prop 22

In summary, the California gig worker law allowed app-based transportation and delivery companies an exception to California Assembly Bill 5. Subsequently, these companies could now classify drivers as “independent contractors” rather than “employees.” Given that, employers do not need to provide many mandated employee benefits such as:

• time-and-a-half for overtime,
• paid sick time,
• employer-provided health care,
• bargaining rights, and
• unemployment insurance.

California Superior Court Decision

As has been noted above, earlier this year, the Biden administration’s U.S. Department of Labor withdrew an independent contractor rule. Basically, the rule’s elimination, which made it easier to classify workers as independent contractors, signaled a shift in governing ideals. Above all, it seemed that the Biden administration wanted to reclassify ride and delivery workers as employees with full benefits. Afterward, gig economy companies including Uber, Lyft, Doordash, and Instacart pushed back against any notion of impending changes. However, the ruling by Alameda County Superior Court Judge Frank Roesch fell in line with the Biden administration’s previous actions. In conclusion, Judge Roesch ruled the California gig worker law unconstitutional because it was “not limited to a single subject.” Also, Prop 22 included a seven-eighths requirement for the legislature to be able to change the initiative. As a result, it infringed on the legislature’s power to set workplace standards. Therefore, the entire ballot measure is unenforceable. However, even with the ruling, the initiative will stay in force while mobile application-based service platforms appeal the ruling.