by Reinhard von Hennigs

Who won the recent elections? No, I do not want to talk about the presidential election. I want to talk about who won California Proposition 22. This Proposition 22 is a proposition that would allow companies like Uber, DoorDash, and other companies that provide door to door service via a gig economy to treat their drivers, freelancers, 1099 workers, or their employees as traditional W-2 employees. This tax treatment and classification could have consequences in California. Companies like Uber would have more employees on the books that would require a health plan, overtime compensation, among other things. Proposition 22 was one of the most expensive propositions in recent history in California. Over $200 million were raised in order to support marketing, advertising, and lobbying for the proposition. Now, it seems like the proposition has passed. 

What does this mean for German companies in the Silicon Valley? What does this mean for us as visitors in the USA? First of all: It may mean that our fares when share riding in a car will remain the same. If it was the other way around and the companies had to classify their workers as employees, then the fares would likely go up.

This also means that rules for the gig workers could be used by German companies in the valley and in California as well. This can also be a precedence for how other US states could treat gig-workers in the future. Not a legal precedence, but practical or political precedence. If other states who want to implement drivers like Uber drivers to be gig workers or employees of the company, the verdict is out in California. People, in general, do not like that. While a free economy has its price, the price in this matter seems to be determined by the taximeter or the Uber app’s alternative.

The Author

Reinhard von Hennigs (LL.M. McGeorge) is the Chairman and Founder of BridgehouseLaw LLP, a North Carolina-based law firm with offices in the United States, Canada, and Germany. He is admitted to practice law as an Attorney in the USA (North Carolina), Germany (Rechtsanwalt), Georgia (Foreign Law Consultant) as well as with the United States Supreme Court.