Challenge To California's Gig Economy Worker Law To Be On November Ballot

The California Secretary of State on Friday announced that a measure meant to alter the state's recently enacted gig economy worker law-- otherwise known as AB-5-- has qualified for the November ballot. In order to become eligible for the ballot, the initiative needed 623,212 valid petition signatures, which is equal to five percent of the total votes cast for governor in the November 2018 General Election, said Secretary Alex Padilla in a written statement. He did not specify how signature the petition actually received.

The signature gathering efforts were organized by a coalition known as Protect App-Based Drivers & Services, and that group in turn has received major funding from Uber, Lyft, and DoorDash. All three of those app-based services lobbied hard to prevent AB-5 from passing. They claim measure protects drivers' ability to continue to work as independent contractors with flexibility over when, where, and how long they work, but it also is supposed to provide on demand workers with new earning guarantees and benefits, including a minimum earning guarantee equal to 120-percent of the minimum wage plus 30-cents per mile toward expenses.

Other benefits touted by the supporters of the measure include the following:

  • A health care stipend that covers 82 percent of the cost of a Covered California Plan, or$367per month to a driver on average. Drivers start earning this stipend at 15 hours per week and reach the full stipend at 25 hours per week. Drivers can earn multiple stipends from multiple companies.
  • The health care stipend in the ballot measure is more generous than state and federal law which only requires health care be provided to those who work more than 30 hours per week and no benefits for part time workers.
  • Occupational accident coverage to cover on-the-job injuries – similar to workers compensation insurance.
  • Enhanced auto and liability insurance

They claim the measure also provides better protections for customers, including recurring background checks of drivers, mandatory safety training for drivers, zero tolerance for alcohol and drug offenses, and a cap on the number of hours drivers can be behind the wheel to prevent sleepy driving.

California Assemblywoman Lorena Gonzalez, the San Diego Democrat who pushed AB-5 through the Legislature, has said there are plans to refine the bill. She also has insisted that some complaints about AB-5 have been based on misinformation.

AB-5 was forecast to be a financial boon for California's suddenly cash-strapped government. Lawmakers and Governor Gavin Newsom hoped it would close loopholes in state law that allowed for what some lawmakers called a misclassification of gig economy workers that cost the state upwards of $7-billion dollars in payroll tax revenue.

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