California Appeals Court Gives Green Light to Proposition 22

The California Court of Appeal in Castellanos v. State of California confirmed earlier this month that, under Proposition 22, businesses in California can continue to classify certain workers as independent contractors—but only if they meet certain criteria and are provided with certain benefits and protections. Proposition 22 was a ballot measure approved by California voters in November 2020 that exempts app-based ride-hailing and delivery companies from California's Assembly Bill No. 5 (AB 5), which requires companies to classify their workers as employees unless they meet certain criteria for independent contractor status (the so-called ABC test). Proposition 22 allows certain app-based drivers, delivery workers, and gig workers in California to be classified as independent contractors if they have control over their work, entrepreneurial opportunity, provide their own tools and equipment, possess special skills, and receive limited benefits.