The labor law in California, that classifies drivers of the transport services giants Uber Technologies Inc. and Lyft Inc. as independent contractors instead of employees, is up for a crucial final court test. This critical legislation’s constitutionality will be up for argument in the state’s Supreme Court.
This particular legal ruling, termed Proposition 22, had received significant backing, particularly from rideshare companies in the gig economy sector such as Uber and Lyft. The primary contention of these companies is that the drivers should remain categorized as independent contractors for their business models to sustain. This act had been approved by voters and was heralded as a massive boost for the gig economy players.Bloomberg Law reports that more than $200 million had been spent by Uber, Lyft, and DoorDash Inc. in their respective campaigns to have the drivers regarded as independent contractors.
The litmus test for this law does carry weighty implications beyond the legal rulings. Over a million gig workers in California who are currently considered independent contractors might be eligible for employee benefits such as overtime pay, should the law fail to pass its last hurdle. This proposition is hence critical in deciding the future trajectory of the gig economy, and the distinction between independent contractors and employees.
- Rideshare drivers and unions are seeking to overturn Proposition 22
- The case examines the scope of the state’s century-old voter initiative process