CALIFORNIA – On July 25, the California Supreme Court upheld Proposition 22, ensuring the right of gig economy companies, such as Uber and Lyft, to classify their drivers as independent contractors.
This decision upholds the autonomy of independent workers and benefits consumers by maintaining the availability of services like ride-sharing and grocery delivery.
Glenn Spencer, Senior Vice President of Employment Policy, stated in a press release: “Today’s decision by the California Supreme Court is a victory for workers who value independent contracting for its flexibility, work-life balance, and entrepreneurial opportunities. This ruling should resonate with Congress, state legislatures, and government agencies across the country.”
In 2019, California’s AB-5 law introduced the ABC test to determine independent contractor status, potentially reclassifying many as employees and stripping them of their flexibility.
In response, gig economy companies championed Proposition 22, which exempted them from AB-5 if they provided certain benefits. This measure was approved by voters in November 2020.
Despite challenges from unions and subsequent legal battles, the Supreme Court’s decision ultimately preserves the intent of Proposition 22, allowing individuals to continue working independently under its provisions.
The California Supreme Court’s decision to uphold Proposition 22 represents a significant milestone for the gig economy and independent workers.
This ruling not only ensures the continuity of a business model that benefits both workers and consumers but also sets an important precedent for future legislation in the digital economy.
