On January 2, 2020, the Attorney General for the State of California released the title and summary of Initiative 19-0026—a proposed ballot measure that would overturn the state’s recently enacted independent contractor law, AB 5, with respect to app-based transportation providers and delivery drivers. Under California state law, the initiative’s sponsors may now begin collecting signatures to put the matter on the November 2020 ballot.

By way of background, in September 2019, California adopted a sweeping new law regarding worker classification, which is predicted to result in hundreds of thousands of independent contractors being re-classified as statutory employees. The on-demand “platform” economy is expected to be dramatically impacted, and a number of platform companies have sponsored an initiative to provide certain specified benefits for their workers, while still allowing them to maintain independent contractor status.

As summarized by the Attorney General, the proposed initiative:

Establishes different criteria for determining whether app-based transportation (rideshare) and delivery drivers are “employees” or “independent contractors.” Independent contractors are not entitled to certain state-law protections afforded employees—including minimum wage, overtime, unemployment insurance, and workers’ compensation. Instead, companies with independent contractor drivers will be required to provide specified alternative benefits, including: minimum compensation and healthcare subsidies based on engaged driving time, vehicle insurance, safety training, and sexual harassment policies. Restricts local regulation of app-based drivers; criminalizes impersonation of such drivers; requires background checks.

Initiative supporters must now collect almost 625,000 signatures (which must be verified) in order to place the measure on the fall ballot. While they ostensibly have 180 days in which to do so, as a practical matter, supporters seek to collect signatures as quickly as possible to ensure a sufficient number and adequate time for verification.

As the fate of AB 5 is challenged in courts and on the ballot, Littler will keep you apprised of relevant developments.