Years of Legal Battles
The battle over gig workers’ status began in 2018 when a Supreme Court ruling and a subsequent bill aimed to reclassify them as employees.
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The ride-hail companies fought back, culminating in the 2020 ballot measure, Proposition 22, which was passed with 58% of the vote.
The Costly Proposition 22 Campaign
Five firms, including Uber and Lyft, spent over $200 million on the Proposition 22 campaign, making it the most expensive ballot measure in California’s history.
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The initiative aimed to solidify gig workers’ status as independent contractors, allowing companies to avoid providing employee benefits.
Impact of Proposition 22
As independent contractors, gig workers miss out on essential benefits like sick leave, overtime pay, and workers’ compensation.
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This classification has significant implications for their job security and financial stability, leaving many workers vulnerable.
The SEIU Challenge
The SEIU and four gig workers challenged Proposition 22, arguing that it conflicted with the Legislature’s power to administer workers’ compensation.
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They claimed that making gig workers ineligible for these benefits rendered the law unconstitutional.
Supreme Court's Unanimous Ruling
On July 20, 2024, the California Supreme Court ruled unanimously to uphold Proposition 22.
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The justices emphasized that the initiative process holds power equal to the legislature, allowing it to amend workers’ compensation statutes.
Protect App-Based Drivers + Services' Response
The coalition behind Proposition 22, Protect App-Based Drivers + Services, celebrated the decision as a “historic ruling.”
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Spokesperson Molly Weedn stated, “The courts have spoken, and this issue can finally be put to rest.”
SEIU's Disappointment
Despite the ruling, SEIU leaders expressed their disappointment and vowed to continue fighting for gig workers’ rights.
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SEIU California Executive Director Tia Orr highlighted the need for a union to advocate for better wages, sick leave, and healthcare coverage.
Political and Economic Ramifications
Uber and Lyft have fortified their political influence in California, spending millions to support like-minded legislators.
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The ruling preserves the current structure of the gig economy in the state, preventing gig workers from being reclassified as employees.
A Precedent for Future Ballot Measures
The Proposition 22 campaign set new precedents for spending on ballot measures, showcasing the significant financial power of gig economy companies.
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This ruling could influence future initiatives and the extent of their impact on employment laws.
Open Questions About Initiative Power
The Supreme Court’s decision leaves open questions about the limits of initiative power, particularly regarding workers’ compensation.
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The justices noted that they would address such issues only when faced with a direct challenge to a legislative act.
Future of Gig Work in California
For now, the ruling solidifies gig workers’ status as independent contractors in California.
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This decision signals ongoing debates about gig economy regulations and workers’ rights, shaping the future of gig work in the state.