California’s AB5 sets a restrictive three-part “ABC” test for determining employee or independent contractor classification that aims to stamp all workers as employees. In response, on November 3, 2020, Proposition 22 was passed by 59% of California voters as an initiative statute, effectively providing exemptions to AB5 for many app-based drivers.
However, this statute was ruled unconstitutional by the Superior Court of California in Almeda Country on August 20, 2021. The Court determined Proposition 22 unconstitutionally limited the Legislature’s power to provide and enforce worker’s compensation benefits. This ruling has since been appealed and the battle over Proposition 22 and California’s AB5 continues in the California First District Court of Appeals this week.
The State is responsible for defending all initiatives once passed and is defending the Proposition against its previous challenges. In finding Proposition 22 conflicts with the worker’s compensation provisions, the Superior Court created an issue where none had existed before.
A ruling is expected within 90 days.
