The battle over how the “gig economy” will be regulated has heated up, and not surprisingly, the front line is in California. The state of California recently enacted Assembly Bill 5, which will go into effect in January 2020. This bill creates a rigorous set of tests that companies must meet before being able to exclude workers as being considered an “employee”. In response to the legislation, several companies (Uber, Lyft, and DoorDash) have proposed a ballot measure for Californians to consider which states “an app-based driver is an independent contractor” if certain conditions are met. The ballot initiative also seeks to appease some who have criticized the lack of workplace rights protection and benefits for gig workers by expressly indicating certain protections and benefits will apply to even gig workers who are not deemed “employees” subject to state laws governing the workplace.
The proposal calls for mileage reimbursement rates to cover gig workers’ gas and vehicle maintenance costs, to be adjusted as necessary for inflation. Drivers who work more than 25 hours per week would receive a stipend covering 82% of the least expensive health plan under California’s health insurance exchange (marketplace). Drivers would be required to undergo criminal background checks to check for those with certain prior felonies, most notably driving under the influence of alcohol or drugs.