When AB 5 passed, insurance carriers came in to audit many policyholders attempting to convert “independent contractors” to employees. However, with the passage of Prop 22, motor carriers, such as truckers, can now make compelling arguments concerning the applicability of Prop 22 to their line of business.
Recall, just a few months ago, in September, that AB 2257 amended AB 5 and created additional exemptions from the “ABC test” for certain selected occupations. Prop 22, however, basically amended AB 5 again, paving the way for the transportation industry to make inroads against the claim that their independent contractors are all employees.
In essence, Prop 22 established a category that makes sense in the 21st Century of Gig economy, namely that independent contractors are entitled to some benefits that employees would get while still maintaining the label “independent contractors”.
There are now four conditions that must be met in order to establish a driver’s independent contractor status. The network company:
1.) Cannot “unilaterally prescribe specific dates, times of day, or a
minimum number of hours” that the drivers must be logged into
the company’s online platform,
2.) Does not require the drivers to accept any specific ride or
delivery request to maintain access to the online platform,
3.) Does not prevent the driver from working for other rideshare or
delivery apps “except during engaged time,” and
4.) Does not restrict the drivers from working in any other lawful
occupation or business.
Not surprisingly, major litigation commenced within days of Prop 22 passing with the argument being that Prop 22 should not apply retroactively according to the Department of Industrial Relations. Therefore, a strategic course of conduct is what is now required more than ever in the motor carrier industry in California.
If you have any questions regarding this critical new issue, please contact Nicholas Roxborough at (818) 992-9999, ext. 222, or Trevor Witt at ext. 224.
