The future of work decided by California referendum

Posted by on November 5, 2020  /  0 Comments

One of the most contentious issues in platforms is the employment status of those who offer services on them: are they employees or independent contractors? If the former, in Sri Lanka they would qualify for employer contributed mandatory retirement savings; in the US, they would get health insurance and other benefits. A state law in California said those who offer services on platforms are employers. A vote on a proposition said no.

In voting to support Uber and Lyft, Californians rejected the principles outlined in a 2018 State Supreme Court ruling and enshrined in a 2019 state law that said workers who performed tasks within a company’s regular business — and were controlled by the company and did not operate their own firms — must be treated as employees. Under Prop. 22, gig workers are exempted from these rules and can continue to work independently.

The Yes on Prop. 22 campaign, backed by Uber, Lyft and DoorDash, celebrated the victory. “California has spoken,” Geoff Vetter, a spokesman for the campaign, said in a news release. “Prop. 22 represents the future of work in an increasingly technologically-driven economy.”

California, the home of many platform companies, is likely to have a disproportionate impact. In a jurisdiction that did not allow this form of direct democracy the outcome would have been different.

If everyone had health insurance and retirement benefits, the issue would be less significant. But until that day . . .

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