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California high court to decide if gig worker classification law is constitutional

On Behalf of | Jul 25, 2023 | Employment Law, Wage & Hour Law |

The gig economy surged in popularity in recent years thanks to the popularity of app-based services such as Uber and Lyft. But many gig workers for these app services over the years have raised concerns that their classification as independent contractors left them without much-needed benefits.

The debate on whether gig workers deserve the same labor protections as full-time employees has entered a new stage. The California Supreme Court recently agreed to decide whether a law called Proposition 22 is constitutional.

Proposition 22 exempts app-based delivery and transportation companies from another law called Assembly Bill 5 (AB 5). AB 5 held that most wage-earning workers in California must be classified as employees. But Proposition 22 allowed companies like Uber, Lyft and DoorDash to continue classifying their drivers as independent contractors.

The gig economy companies in support of Proposition 22 argue that they’re unfairly targeted by laws such as AB 5. They also maintain that their drivers prefer the flexible working conditions of independent contractors.

The dangers of misclassification

Why is the misclassification of workers such a big concern?

Misclassifying employees allows employers to avoid providing basic labor protections. These include minimum wage, overtime pay, paid sick days and workers’ compensation. Misclassification also allows employers to avoid paying payroll taxes.

And because they’re not considered employees, independent contractors lack unemployment insurance and zero protection from employer retaliation. They also have no legal right to form or join a union.

As per California Department of Industrial Relations, employee misclassification is a form of fraud.

Any worker – whether a gig worker or a full-time employee – who feels their employer is exploiting them should consider seeking advice from a legal professional. An attorney can help workers determine if their employer broke any laws and prepare their case for a trial.