Uber or Lyft Driver – California Workers Comp Contractor vs Employee – Prop 22
One of the most heated online and in-person (before COVID-19) debates that I had witnessed in California – Is an Uber or Lyft driver a California Workers Comp Contractor or an employee?
Some of the most widely read J&L articles over the last year came from the passage of California AB 5. AB 5 slammed the door on gig workers as independent contractors.
From a prior article –
The California Supreme Court retooled the contractor-subcontractor relationship into three points of consideration: (distilled for brevity)
- The degree of control by the main contractor
- The subcontractor performs work that is not the usual work performed by the contractor
- The subcontractor has a business that is independently established in the same trade from the contractor
- I added in this one as carriers are now including it in their workers’ comp audits – the subcontractor is not integral to the contractor’s existence.
AB 5 reiterated the infamous Dynamex decision. The rule-of-thumb became the ABC decision on a worker’s status. The ABC comes from the first three in the above list.
Why Should You Care If You Do Not Have A Business in CA?
I have referred to this statement often when writing California-based articles. What happens in California will be coming to a state near you or in your state.
California tends to lead the way on some of the Workers Comp decisions by other State Legislators. For instance, not long after the Dynamex decision, Massachusetts enacted similar regulations along with many other states.
Other states have retreaded the California Workers Comp Contractor Dynamex decision many times.
- (19-0026A1)
CHANGES EMPLOYMENT CLASSIFICATION RULES FOR APP-BASED TRANSPORTATION AND DELIVERY DRIVERS. INITIATIVE STATUTE.
Establishes different criteria for determining whether app-based transportation (rideshare) and delivery drivers are “employees” or “independent contractors.” Independent contractors are not entitled to certain state-law protections afforded employees—including minimum wage, overtime, unemployment insurance, and workers’ compensation. Instead, companies with independent-contractor drivers will be required to provide specified alternative benefits, including minimum compensation and healthcare subsidies based on engaged driving time, vehicle insurance, safety training, and sexual harassment policies. Restricts local regulation of app-based drivers; criminalizes impersonation of such drivers; requires background checks. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments
California Workers Comp Contractor Vote Results
I will return to this article and update it or write a new one after the vote on Prop 22. One would have to think the results will affect other California contractors and possible employers and contractors nationwide.
Also Read: California Insurance Carriers Update -Allstate No New HO Policies
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