It’s encouraging to see the will of the people upheld in the courts when it comes to how businesses operate in this uncertain economy.

After a legal challenge dating back to 2021, the California Supreme Court recently ruled that Proposition 22 was constitutional.

Approved by voters in 2020, Prop. 22 allows certain app-based rideshare and delivery services to classify their workers as independent contractors. Prop. 22 also came with certain benefits for those contractors, including a 120% minimum wage guarantee during engaged time, payment per mile, health care coverage for those who work a certain number of hours and the development of anti-harassment policies.

Prop. 22 came along at an uncertain time, as another court case, called Dynamex, established the ABC test in 2018 that is still in effect in California.

Relating to classification of workers, the ABC test says a worker is considered an employee and not a contractor unless ALL three of the following conditions are met:

A: The worker is free from the control and direction of the hiring entity in connection with the performance of the work.

B: The worker performs duties outside the usual course of the hiring entity’s business.

C: The worker is customarily engaged in an independently established trade, occupation or business of the same nature.

The ABC test meant uncertainty and likely litigation for app-based drivers. And it still carries legal ramifications for other types of employers. Prop. 22 voters sought to alleviate that uncertainty, though it was quickly challenged in court.

In its recent decision, the California Supreme Court agreed with a lower court that the California legislature has the power to regulate the state’s workers’ compensation system. California voters also have the ability to enact law through the initiative process that touches on workers’ comp.

The California Chamber of Commerce filed a legal brief in support of Prop. 22 that summed up the outcome nicely.

“Workers want the flexibility of app-based jobs and consumers benefit from the services they provide,” according to the CalChamber.

Couldn’t have said it better myself.