Law and Politics, National, Retail, topslot

California Drivers Lose Ground Amidst National Turmoil; Other Workers Score Victories

November 5, 2020

By Steve Wishnia

Struggling low-wage drivers in California suffered a major setback with the passage of Prop 22.

SAN FRANCISCO, Calif.—California voters approved a ballot initiative that will lock app-based transportation and delivery workers into nonunion independent-contractor status Nov. 3. But Florida voted to raise the state’s minimum wage to $15 an hour over the next six years, and Colorado passed a measure that will give workers 12 to 16 weeks of paid family leave.

California’s Proposition 22 will give gig-economy companies a huge exemption from the state’s 2019 law that strictly limits when workers can be defined as independent contractors, who don’t get employees rights and protections such as minimum wage. It won 58% of the vote, with the San Francisco Bay Area the only major region of the state where no votes prevailed.  

The campaign was the most expensive one waged over any ballot initiative in the state’s history. The five app-service companies sponsoring it outspent the labor-backed coalition opposing it by more than 10 to 1. As of Oct. 29, they had collected almost $203 million, according to state campaign-finance records analyzed by Ballotpedia. Uber put in $57 million, DoorDash $52 million, Lyft $49 million, InstaCart $32 million, and Postmates $13 million. 

The No on Prop 22 campaign had received $19.75 million, much of it from various SEIU affiliates, the Teamsters, the California Labor Federation, and the United Food and Commercial Workers.

“The obscene amount of money these multibillion-dollar corporations spent misleading the public doesn’t absolve them of their duty to pay drivers a living wage, provide PPE to protect workers as the pandemic deepens, or repay taxpayers for the nearly half a billion these companies have cheated from our state unemployment fund,” the California Labor Federation posted on Twitter Nov. 4. “The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay, and care when they’re hurt at work.”

Prop 22 would classify app-based rideshare and delivery drivers as independent contractors instead of employees unless the company sets their hours, forces them to accept specific trips or deliveries, or restricts their working for other companies. That exempts them from Assembly Bill 5, the 2019 law, which deems them employees unless they are genuinely running an independent enterprise “outside the usual course of the hiring entity’s business.”  

Hiring independent contractors also exempts employers from paying minimum wage and overtime, having to provide paid sick leave, and contributing to unemployment insurance and workers’ compensation. As a substitute, Prop 22 would have app-based employers pay them a minimum wage of $15.60 an hour (120% of California’s minimum wage) plus 30 cents a mile for “engaged time,” time they have an active or pending fare or delivery. It would also provide some subsidies for health insurance, if drivers average at least 15 to 25 hours a week of engaged time.

The “engaged time” requirement means the actual minimum wage drivers would get would be more like $5.64 an hour if time they spend driving empty is counted, according to a 2019 estimate by the University of California at Berkeley Labor Center. The No on 22 campaign said that the initiative’s health coverage would be capped “at only a fraction of the lowest-cost Covered California plan” and that drivers would have to “work far more than 39 hours a week just to qualify for the minimum health-care benefit.” 

The initiative also specifies that it can only be modified if the changes win a seven-eighths supermajority vote in each chamber of the state legislature and are signed by the governor, or are approved by the voters. It also locks in a ban on drivers joining unions, as the National Labor Relations Board ruled in May 2019 that Uber drivers are not employees eligible to unionize under federal law.

“Proposition 22 leaves California’s gig workers with no representation, no collective bargaining rights, no path to negotiate a livable wage, and no ability to have a real voice in their pay and benefits,” Brendan Sexton, executive director of the Independent Drivers Guild, a Machinists Union affiliate which advocates for Uber and Lyft drivers in the New York City area, said in a statement Nov. 4.

The IDG, which is partially funded by Uber, has opposed proposals to have New York State enact a law to classify app-based drivers as employees. Instead, it advocated a minimum wage of $17.22 per hour after expenses, which the city enacted in late 2018. 

The Guild is also urging state legislatures to empower these workers and their unions with full collective-bargaining rights.” Independent contractors are not allowed to bargain collectively under federal labor law, however.

Other initiatives

Meanwhile, Florida voters approved Amendment 2, which will raise the state’s minimum wage from $8.56 an hour to $10 on Sept. 30, 2021. It would then go up by $1 each year until it reaches $15 in 2026. The measure got 61% of the vote and won by more than 2.2 million votes, according to returns compiled by the Associated Press.

Colorado’s Proposition 118, which won with 57% of the vote, would give 12 weeks of paid leave for reasons such as having a serious health condition or caring for a family member with one; taking care of a new baby; and having a family member on active-duty military service. It would be funded by a payroll tax split 50/50 between employers and employees. Lower-income workers would get paid a larger share of their salaries, and an additional four weeks of leave would be allowed for pregnancy or childbirth complications. 

Arizona voters narrowly approved Proposition 208, which will levy a surcharge on taxable annual income over $250,000 for single persons or $500,000 for married joint filers, and use that revenue to fund public education. In Maine, the city of Portland and the town of Rockland voted to raise the minimum wage to $15 by 2024, with Portland workers to get “hazard pay” of at least $22.50 during states of emergency.

November 5, 2020

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