The gig economy - Uber, Lyft, DoorDash, Instacart, and similar platforms - was the primary target of AB5. However, Proposition 22 (2020) created a significant carve-out. Understanding this complex landscape is essential for both platforms and workers.
Timeline of Key Events
April 2018: Dynamex decision establishes ABC Test
September 2019: AB5 signed into law
January 2020: AB5 takes effect
November 2020: Proposition 22 passes (58.6% yes)
August 2021: Prop 22 ruled unconstitutional by Alameda County Superior Court
March 2023: California Court of Appeal upholds most of Prop 22
2024-Present: Ongoing litigation and legislative efforts
Proposition 22 Explained
What Prop 22 Does
Proposition 22 exempts "app-based transportation and delivery companies" from AB5, allowing them to classify drivers as independent contractors with certain benefits:
- Earnings Guarantee: 120% of local minimum wage for engaged time
- Healthcare Stipend: For drivers averaging 25+ hours/week
- Accident Insurance: Medical expenses and disability benefits
- Anti-Discrimination Protections: Sexual harassment policies required
Companies Covered by Prop 22
| Category | Examples |
|---|---|
| Rideshare | Uber, Lyft |
| Food Delivery | DoorDash, Uber Eats, Grubhub, Postmates |
| Grocery Delivery | Instacart, Shipt |
Not Covered: Amazon Flex, courier services, non-app-based delivery, and many other gig platforms are NOT covered by Prop 22 and must comply with AB5.
For Gig Workers: Know Your Rights
Under Prop 22 (Uber, Lyft, DoorDash, etc.)
- You are an independent contractor, not an employee
- No overtime pay, paid sick leave, or unemployment insurance
- Entitled to 120% minimum wage guarantee for "engaged time"
- Entitled to $0.30/mile vehicle expense reimbursement
- Healthcare stipend if averaging 25+ hours/week
- Accident insurance while on the job
NOT Covered by Prop 22
If you work for a gig platform NOT covered by Prop 22, AB5 applies. You may be entitled to:
- Minimum wage for all hours worked
- Overtime pay (1.5x after 8 hours/day or 40 hours/week)
- Meal and rest breaks
- Paid sick leave
- Workers' compensation
- Unemployment insurance
For Platform Companies
Covered by Prop 22
If your platform facilitates transportation or delivery via app:
- Verify your business model qualifies under Prop 22
- Implement required earnings guarantees
- Provide healthcare stipend program
- Maintain accident insurance coverage
- Implement anti-discrimination policies
NOT Covered by Prop 22
If your platform doesn't qualify (e.g., TaskRabbit, Handy, Care.com):
- Apply ABC Test to your worker relationships
- Consider B2B exemption if applicable
- Evaluate reclassifying workers as employees
- Consult employment counsel
Current Legal Status
Prop 22's legal status has been contested:
- 2021: Trial court ruled unconstitutional (limiting legislature's power)
- 2023: Appeals court reversed, upholding most provisions
- One provision struck: Workers' comp exclusion removed
- Ongoing: Potential California Supreme Court review