Since Prop 22 passed in November, app-based companies can now continue to classify workers as independent contractors instead of employees. California voters approved the measure by a 59% to 41% margin after companies spent more than $200 million in support of the initiative.

Bill Sokol, a Bay Area labor and employment lawyer, tells Inside the Issues Prop 22 will have massive impacts throughout California in the years to come.

What You Need To Know

  • Prop 22 allows app-based companies to continue classifying workers as independent contractors instead of employees

  • Currently, the state’s gig economy makes up around 10-15% of the workforce, but labor lawyer Bill Sokol expects that number to grow in the years ahead

  • California voters passed the ballot measure by a 59% to 41% margin after companies spent more than $200 million in support of the initiative

“This will be the major issue across the country in labor law for the foreseeable future,” Sokol explained. “Workers are going to try to preserve their rights as employees and there are going to be a lot of corporations trying to turn them into independent contractors, that’s going to play out one state at a time.”

Currently, the state’s gig economy makes up around 10-15% of the workforce, with contractors primarily concentrated in Los Angeles and San Francisco. In the future, Sokol anticipates the gig economy will grow throughout California and workers’ protections will continue to weaken after the passing of the proposition. 

“Based on exit polls, 40% of the people who voted for this thought they were doing it to help drivers,” he noted. “They said this is going to make things better for drivers isn’t it and yet this is a law that’s going to take away minimum wage, overtime after eight hours, paid sick leave, and workers compensation.”

The labor lawyer predicts Prop 22 will have a ripple effect around the country as more and more companies try to reduce labor costs. He adds he’s already seen this begin to play out in regions of the South.

“In Texas, the politicians are going to try to make all building trades workers independent contractors. In other words, your carpenters, your laborers, your ironworkers,” Sokol said.

Prop 22 is likely to stay in California since one of the clauses within the proposition makes it extremely difficult to overturn. In order to upend the new law, the state legislature would need a seven-eighths supermajority in support of the action. 

However, Sokol said the ballot measure will have to confront litigation in the months ahead to survive.

“Is there a denial of due process? Is there a denial of protection?” Sokol asked. “I think that’s going to turn into a legal battle and I’m not convinced Prop 22 will withstand scrutiny by the California Supreme Court.”

In January, labor unions sued to overturn the new law arguing that it undermines California’s constitution. While the legal fight goes on, Sokol said compromise may also be a viable option in the wake of Prop 22’s victory.

“The only way you make money, you raise fares and you lower wages. So eventually as people see their fares go up and their drivers start to complain to them about their lower wages, we’ll continue the battle,” he said. “Lyft already wants to talk to unions because they can see what’s coming. They know the battle is not over.”

Looking towards the future, the labor lawyer said the pandemic and Prop 22 will have many unknowable consequences throughout Californian workplaces. Already, he said remote work is commonplace, fewer people are going into offices and essential workers have been more clearly defined in our culture. 

“There are going to be massive unemployment problems that are not going to be worked out easily or quickly. We’re going to need huge stimulus packages just to get people back to work or we’re going to have unemployment records that are just outrageous for years to come,” Sokol added. “But I think all of that is in the works and all we know for sure right now is that we know nothing for sure but it’s going to be big.”

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