Workers Comp Zone


The magnitude of the COVID health and economic crisis is such that there is little focus on anything else in the workers comp world.

And with good reason. Whatever happens under the Governor’s executive order establishing a presumption of industrial causation and with the batch of COVID presumption bills in the legislative hopper, the crisis has dealt a grievous blow to the California economy. It’s a blow that will have big implications for all sectors of the workers’ comp community. 

After all, the California economy is said to be in free fall, with unemployment currently estimated to be over 20% and unemployment in Los Angeles approaching 1 or every 4 workers.

But there are other big issues lurking in the background.

It is now “game on” for the effort to repeal AB-5, last year’s landmark legislation that codified the test set forth in Dynamex which adopts an expansive standard for determining who is an employee.

The “Protect App-Based Drivers and Services Act” has now collected sufficient signatures, and will appear on the November 2020 ballot. 

I’m aware of only one initiative which was supported by over $100 million in spending by proponents. That was the series of initiatives on Indian gaming in 1998, which generated a tsunami of cash. 

This year the “gig-employment” companies (Uber, Lyft and Doordash, now joined by Instacart and Postmates) have already contributed $110 million to support the initiative. Although COVID has hit the business model of some of them hard, they are likely to spend “whatever it takes”.

It’s not clear how much money the opponents (unions and their traditional allies) will be able to raise in opposition, particularly in this economic environment. But it will likely be only a fraction of that raised by the proponents.

Messaging will be key.

It is not clear how the public will react to this campaign during the middle of the current crisis. Or how much political capital Governor Newsom is prepared to spend on this when he is beset with a state reeling from budget deficits.

On the one hand, many people are using some of these services (Doordash and Instacart) to cope with the pandemic. They may be sympathetic toward those workers, but also towards those companies. But people are not using Lyft and Uber much during the pandemic, and the urgency of the Uber/Lyft drivers situation may have faded some in the public consciousness.

Whether a majority of voters who have lost their own jobs will be interested in upholding the newly granted employment status of gig-workers is not clear. Depending on the length and severity of the economic downturn, it is possible to imagine public opinion turning in either direction.

Plenty of ads will be helping drive that opinion.

Many jobs are being lost due to the pandemic, and many of those jobs are just not coming back. What people envision in employment and how and where jobs are performed is under review in many businesses and professions.

Essentially, many voters will be voting on their own future. Many may ultimately look at this from the lens of “what’s in it for me”. After the crash of whole industries and mom and pop employers, a large swath of voters may be be forced to transition to performing services in an on-demand, platform based world. Fear for the future will be a factor for many voters, as they try to sort through all this.

This is likely to be a bitter campaign. 

Stay tuned.

Julius Young