In many ways, the 2020 election seems like an ancient event. The Pandemic is over,and the January 6
committee has completed its work. Do you even remember Proposition 22? It was on the same ballot
as Joe Biden and Donald Trump. No one would blame you for forgetting about it. Still, it was a big
deal.

During the 2020 election, the voters passed Prop 22, and it exempted ride-share companies, like
Uber and Lyft, and courier companies, like DoorDash and Instacart, from AB5 and its ABC test. In
August of 2021, a Superior Court judge declared Prop 22to be unconstitutional in the case
Castellanos v. California. However, just a week ago, on March 13, an appellate court reversed the
lower court and declared that Prop 22 was, for the most part, constitutional. That means Uber, Lyft,
DoorDash, Instacart, and other similar companies, are exempt from AB5 and the ABC test. In other
words, those types of businesses can continue to treat their drivers as independent contractors.

However, Prop 22 also requires those companies to give benefits to their workers that are similar to
the minimum levels of protection that employees get in California. For instance, the companies must
pay drivers 120% of the minimum wage. Further, they must provide insurance to cover medical
expenses and lost wages for work-related accidents. They are also required to provide a stipend to
help defray the cost of medical insurance. Depending on the number of hours the drivers spend
driving, the stipend must equal a percentage of the Covered California Bronze plan premium.

The opponents of Prop 22 may appeal Castellanos v. California to the California Supreme Court. If
they do, employment lawyers throughout California will be watching, even if you are not.

Employment Law Office of Ward Heinrichs
4565 Ruffner Street, Suite 207
San Diego, CA 92111
858-292-0792
(858)408-7543 (fax)