California's new 'gig worker' law - why EU must say No

The gig economy is rife with regulatory gray zones: whether companies are in the technology or transportation sector, how gig work should be taxed, and perhaps most importantly, whether its workers are employees or contractors.

California, the US state that gave birth to gig platforms, recently passed a measure to settle this question.

Unfortunately, the decision sets a dangerous precedent that threatens workers' rights around the world.

Last week, California voters approved Proposition 22, which exempts gig companies from a law passed last year that requires them to hire workers as employees.

Like much of Europe, the US has a binary worker classification system in which people are hired either as employees, with guaranteed labour protections and mandatory benefits, or as independent contractors, with few rights but high levels of control over their work.

Though gig platforms have long hired workers as contractors, a law passed by the California state legislature last year, Assembly Bill 5, implied they were employees and owed the related rights, including a minimum wage, healthcare access, and paid leave, all at employers' expense.

Following the passage of that law, a coalition of gig companies drafted Proposition 22 and gathered the signatures required to get it on the ballot.

Proposition 22 creates a new class of precarious workers that have neither the independence and control of true contractors nor the rights and protections of employees.

Unlike true contractors, gig workers are unable to control their own work conditions; they must accept wages set by algorithms and worry about deactivation.

The new law's concessions to workers provide an inadequate, watered down version of employment benefits.

Rather than receiving a minimum wage of at least $12 [€10.20] per hour worked, workers are guaranteed an average wage for the time spent shuttling passengers, coming to an estimated $5.64 per hour worked.

Rather than accessing an employer-sponsored healthcare plan, as they would receive as full-time employees, they will be given an additional payment, which could be applied to cover a portion of the costs of a public plan.

Voters' support of Proposition 22 was fuelled by an intense and deceitful advertising campaign.

Gig companies poured more than $205m into promoting Proposition 22, more than has ever been spent on a US ballot measure and more than ten times what opponents spent.

These funds were applied to misleading tactics, including forcing drivers to respond to surveys before accepting jobs and giving struggling restaurants free delivery supplies with promotional slogans on them.

Voters throughout California were inundated with television, radio, social media, and in-app advertisements that promoted the proposition as a step forward for workers.

First California, next Europe?

The companies that fought for Proposition 22 are already looking beyond California.

Uber CEO Dara Khosrowshahi announced two days after the election that he plans to "work with governments across the US and the world" to replicate the new law.

Gig companies' legislative interference has typically followed legal battles, and the classification cases brought to courts across Europe in recent years make the continent an apt target for attempted expansion.

Gig workers in Germany, the Netherlands, Spain, France, Belgium, and the UK have all contested their lack of employment protections as contractors.

The majority of these cases have been settled in favour of workers.

However, without legislative change, infractions must continue to be dealt with individually, leaving a complex maze of case law and much leeway for companies to chart their own course.

In April 2019, the European Parliament approved a set of minimum rights for workers in casual and short-term arrangements, including platform workers.

Among these rights are a notification of duties, pay transparency, and the ability to work for other companies. Although a step forward, these rights contain no mention of classification status or the associated benefits.

Should companies push for policy similar to Proposition 22 in Europe, these rights could quickly become a ceiling rather than a floor.

Gig platforms offer the promise of on-demand services paired with easily accessible work. But too often, their proliferation has been shepherded by corporations who promote the promise of profit over the plight of workers.

California's Proposition 22 is a dangerous example of companies shaping law to fit their own interests to the detriment of workers and communities.

Europe has the opportunity to present a different model, and legislate protections for workers that mirror the decisions made in courts across the continent.