How to Determine If Your Company Need to Comply with Prop 22
Confused about whether Prop 22 affects you? Here's a step-by-step guide for determining whether or not your business needs to comply with Prop 22.
California's Prop 22, also known as the "App-Based Drivers as Contractors and Labor Policies Initiative," passed in November 2020 and reclassified app-based transportation and delivery drivers as independent contractors, absolving companies such as Uber and Lyft from providing traditional employee benefits.
As a business owner or manager, it is important to understand whether or not you are required to comply with Prop 22. In this blog post, we will provide a step-by-step guide for determining whether or not your business needs to comply with Prop 22.
Step 1: Identify the type of service provided by your company. Prop 22 applies to "app-based transportation and delivery services," which includes ride-hailing, ride-sharing, and delivery services provided through an online-enabled application or platform.
Step 2: Determine whether your drivers are classified as employees or independent contractors. Under Prop 22, drivers who provide app-based transportation and delivery services are considered independent contractors, not employees.
Step 3: Assess whether your company is based in California. Prop 22 is a California law, and it only applies to companies that operate within the state.
Step 4: Confirm if your company has gross annual receipts of over $56 million. The law applies only to companies that exceed this threshold.
Step 5: Review whether your company is providing transportation and delivery services as a business or for personal use. Prop 22 applies only to companies providing transportation and delivery services as a business.
Step 6: After taking these steps, if you can confirm that your business operates in California, provides transportation and delivery services through an app, and has gross annual receipts of over $56 million, you will be required to comply with Prop 22.
It is important to note that this law is new and the regulations are still being developed. It is recommended to consult with legal professionals and stay up-to-date with any changes to the law.