The Battle Over Gig Worker Protections Heads to the California Supreme Court and the US Senate

Technology Policy Brief #86 | By: Mindy Spatt | May 2, 2023
Header photo taken from: calmatters.org/Mike Blake/Reuters


Summary:

Rideshare companies have won the latest round in their fight to stop California’s gig worker protection legislation from becoming law.  At the same time, a high-profile campaign to defeat Julie Su, President Biden’s pick for Labor Secretary, who the industry opposes, failed to stop Su’s nomination from advancing out of Committee to the full Senate.


Analysis
:

Prop 22, the industry backed initiative to roll back gig worker protections in California, passed after a record breaking $224 million campaign, the most ever spent on a statewide ballot initiative.  But a Superior Court Judge deemed the measure an unconstitutional usurping of the state’s authority over workers compensation.  A San Francisco Appeals Court recently overturned that ruling, setting the stage for the issue to go to the state Supreme Court.  

The same battle over the status of gig workers is playing out in Washington.  Julie Su, who delivery and rideshare companies blame for supporting and enforcing worker protections in California while serving as labor secretary there, is seeking confirmation as President ‘Biden’s Labor Secretary, a cabinet-level position.

The Senate Health, Education, Labor and Pensions Committee advanced Su’s nomination on a party line vote on April 26, setting the stage for what will undoubtedly be a close floor vote.  Republicans on the Committee were vociferously opposed, lambasting Su as “The Chief Enforcer of AB 5.”

AB 5 was the California statute that classified some gig workers as employees and hence entitled to minimum wages, sick time and healthcare.  It was dismantled by the expensive and deceptive campaign for Prop 22.   

The Flex association, which represents Uber, Door Dash and other companies that rely on gig workers, complained to Biden in a letter that Su “does not appreciate” that classifying gig workers as employees could cause many to lose access to such work and demanding that she commit to not trying to do so on the federal level.   

Stand Against Su, a new organizations led by the California Business and Industrial Alliance (CABIA) has even gone so far as to run anti-Su ads on Facebook and pricey print and billboard adverts in states represented by Joe Manchin, Kyrsten Sinema, and Jon Tester, in hopes they will break ranks with democrats and vote against her. 

While the industry fears a repeat of AB 5 on a national level if Su is confirmed, they are unlikely to like any of Biden’s choices.  The President has made it clear that he is strongly in favor of increased rights for gig workers.  

And Prop 22 is far from settled.  A strongly worded dissent from Justice Jon Streeter is giving advocates hope as the issue heads to the California Supreme Court.  Streeter criticized the faux benefits Prop 22 put in place as not providing any health or safety protections whatsoever for workers.  

That is certainly the conclusion reached by the National Equity Atlas, whose September 2022 report on rideshare workers’ pay and conditions found that :

  • “Drivers’ median net take-home earnings are just $6.20 per hour under Prop 22. Drivers who pay for health insurance out of pocket earn nearly half of that.”
  • “Drivers would earn nearly $11 more per hour if they were classified as employees.”
  • “Rideshare work has become less flexible and more controlled by rideshare companies under Prop 22.

Su’s opponents argue the opposite, although they have no data to back up their claims, and are likely to ramp up their lobbying campaign even further as her nomination heads to the Senate floor for approval.

 

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