California’s Proposition 22 is a 2020 ballot measure that classifies app-based rideshare and delivery drivers as independent contractors rather than employees, while requiring the platforms they drive for to provide a specific package of pay guarantees, health insurance stipends, occupational accident coverage, and safety protections. Voters approved the measure with about 58.6% of the vote, overriding a 2019 state law that would have forced companies like Uber, Lyft, and DoorDash to treat those drivers as full employees.1Ballotpedia. California Proposition 22, App-Based Drivers as Contractors and Labor Policies Initiative (2020) The California Supreme Court upheld the law in July 2024, so the framework described here is the current rule for anyone driving for an app-based platform in the state.
Who Prop 22 Covers and the Contractor Conditions
Prop 22 applies to drivers who use app-based platforms to accept rideshare trips or delivery requests. Under Business and Professions Code Section 7451, a driver is an independent contractor as long as the platform follows four rules. The company cannot dictate the dates, times, or minimum hours a driver must be logged into the app. It cannot require the driver to accept any particular request. It cannot block the driver from working for competing platforms, except during an active trip. And it cannot prevent the driver from holding any other job or running a separate business.2California Legislative Information. California Business and Professions Code 7451 – Protecting Independence
If a platform violates any of those conditions, the driver could potentially be reclassified as an employee under other California labor law. The classification itself decides what protections apply. Employees get overtime, unemployment insurance, paid sick leave, and employer-funded workers’ compensation. Independent contractors under Prop 22 get none of that. In exchange, the law provides the separate benefits laid out in the sections that follow.
Minimum Earnings and Mileage Reimbursement
Prop 22 does not guarantee a traditional hourly wage. It guarantees a floor for “engaged time,” which runs from when a driver accepts a request until the trip or delivery is complete. Time spent waiting between requests does not count. For each hour of engaged time, the platform must pay at least 120% of the applicable minimum wage.3California Legislative Information. California Business and Professions Code 7453 – Earnings Guarantee With California’s statewide minimum wage at $16.90 per hour in 2026, that floor comes to $20.28 per engaged hour.4California Department of Industrial Relations. Minimum Wage If a pickup happens within a city that has a higher local minimum wage, the local rate applies.
On top of that hourly floor, platforms must reimburse vehicle expenses for every engaged mile. The statute set the rate at $0.30 per engaged mile for 2021, with adjustments in later years.3California Legislative Information. California Business and Professions Code 7453 – Earnings Guarantee
Platforms run these calculations every pay period, which cannot exceed 14 days. If actual earnings fall short of the combined hourly-plus-mileage floor, the company must make up the difference in the next pay period. Tips are excluded from the calculation. Platforms cannot count tips toward the floor, cannot keep any portion of a tip, and cannot deduct credit card processing fees from one.
The engaged-time definition is the most criticized piece of the earnings formula. A driver might be logged in for eight hours but spend only four of those hours on active trips. The floor applies to those four hours only, which can push the effective rate for total time worked well below minimum wage.
Health Insurance Stipends
Drivers who log enough engaged hours in a calendar quarter qualify for quarterly payments toward health insurance. The amount depends on average weekly engaged hours during that quarter:
- 25 or more hours per week on average: a stipend equal to 100% of the average Affordable Care Act contribution, benchmarked to the average monthly Covered California bronze plan premium.
- 15 to 24 hours per week on average: a stipend covering 50% of that same benchmark.
- Under 15 hours per week: no stipend.
To receive the stipend, a driver must prove enrollment in a qualifying health plan, typically by submitting an insurance card or proof of coverage within 15 days after the quarter ends. The platform then pays within 15 days of receiving that proof.5California Legislative Information. California Business and Professions Code 7454 – Healthcare Subsidy A driver can collect stipends from more than one platform at the same time if they meet the hour thresholds on each.
Covered California publishes the average statewide bronze plan premium each year, which sets the dollar value of the stipend. Preliminary 2026 rates reflect a weighted average increase of about 10.3% over the prior year, though the final figure depends on whether Congress extends enhanced federal premium tax credits past their scheduled expiration.6Covered California. Covered California Rates and Plans for 2026
Occupational Accident and Death Insurance
Every platform operating in California must carry occupational accident insurance for its drivers. A company that fails to provide this coverage within 90 days of starting operations violates the law. The required policy has three parts.
- At least $1 million in medical expense coverage for injuries sustained while the driver is online with the app.
- Disability payments equal to 66% of the driver’s average weekly earnings for up to 104 weeks after an injury. Average weekly earnings come from dividing total earnings across all platforms over the 28 days before the accident by four.
- Death benefits paid to a spouse, children, or other dependents if a driver dies from an on-the-job injury, calculated under the same formulas California uses for workers’ compensation. Burial expenses are also covered.
Coverage applies whenever a driver is “online,” meaning logged into the app and available to accept requests, or during engaged time on an active trip. There is a gap worth knowing. If a driver is online with one platform but actively completing a trip for another, the first platform’s insurance does not cover the accident. When coverage on multiple platforms does overlap, their insurers split costs proportionally.
This is not workers’ compensation. California’s workers’ comp system is broader, covering repetitive-stress injuries and funding rehabilitation. Prop 22’s accident policy covers acute injuries from specific incidents, so chronic conditions that build up over years of driving sit outside it.
Safety Rules, Background Checks, and Harassment Policies
Before a driver can start accepting trips, the platform must run both a local and national criminal background check consistent with standards set for rideshare companies by the California Public Utilities Commission.8California Legislative Information. California Code BPC 7458 – Criminal Background Checks A driver is permanently barred from using the platform after a conviction for a serious felony, a hate crime, or certain violent or sexual offenses. Convictions for other specified crimes within the past seven years are also disqualifying.
Every platform must publish a sexual harassment policy that identifies prohibited conduct, sets up a confidential complaint process, and protects drivers and customers from retaliation for good-faith reports. Drivers must review and acknowledge the policy before their first trip.9California Legislative Information. California Code, Business and Professions Code – BPC 7457 – Sexual Harassment Policy Harassment claims under this section are handled through California’s Unruh Civil Rights Act, which provides actual damages plus statutory penalties.
Platforms must also maintain a zero-tolerance policy for drug and alcohol use. If anyone reports through the app that a driver appears to be under the influence, the platform must immediately suspend that driver’s access pending investigation.10California Legislative Information. California Code, Business and Professions Code – BPC 7460 – Zero Tolerance The statute includes a safeguard: a driver or customer who knowingly files a false report can also be suspended.
Taxes You Owe as an App-Based Driver
Because Prop 22 keeps drivers classified as independent contractors, tax responsibilities fall on the driver that an employee would never see. The biggest is self-employment tax, which covers both the employee and employer shares of Social Security and Medicare. The combined rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.11Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) High earners face an additional 0.9% Medicare surtax on self-employment income above $200,000 for single filers or $250,000 for joint filers.
Nothing is withheld from platform payments, so drivers owe quarterly estimated taxes to both the IRS and the California Franchise Tax Board. The federal due dates on a standard calendar year are April 15, June 15, September 15, and January 15 of the following year.12Internal Revenue Service. Estimated Tax Missing those deadlines triggers penalties and interest.
Independent contractors can deduct business expenses to offset the hit. The IRS standard mileage deduction for 2026 is 72.5 cents per business mile, which bundles gas, depreciation, insurance, and maintenance into one rate.13Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile Importantly, miles driven for the deduction include the entire time a driver is logged in and available, not just engaged time, so the tax deduction is substantially more generous than Prop 22’s engaged-mile reimbursement. Phone costs, car washes, and parking fees tied to driving are also deductible.
Where the Law Stands After the 2024 Court Ruling
Prop 22 drew immediate legal challenges. Labor unions argued it violated the California Constitution by stripping the legislature of its authority to create a workers’ compensation system for gig drivers. A trial court struck the law down in 2021, a state appeals court reversed that decision in 2023, and the California Supreme Court settled the matter in July 2024 in Castellanos v. State of California. The court upheld Prop 22, finding that voters hold the same power as the legislature to legislate on subjects like workers’ compensation, and that because the legislature had not actually tried to extend workers’ comp to app-based drivers, there was no live conflict to resolve.14California Courts. Castellanos et al. v. State of California et al.
One piece of the original measure did not survive. Prop 22 initially treated any legislation on subjects like collective bargaining for drivers as an “amendment” to the proposition, which would have required a seven-eighths supermajority to pass.15California Secretary of State. Proposition 22 – Text of Proposed Laws A California appeals court struck that provision down in 2023. The legislature can now pass collective-bargaining legislation for gig drivers by a simple majority, though any such law could still face challenges over whether it conflicts with other parts of Prop 22.
How Prop 22 Can Change
Prop 22 is unusually hard to amend. Because voters enacted it, the legislature cannot repeal or rewrite it on its own. Any legislative amendment must pass both chambers with a seven-eighths supermajority, must be “consistent with and further the purpose of” the original measure, and must be published in final form at least 12 business days before a vote in either chamber.15California Secretary of State. Proposition 22 – Text of Proposed Laws That seven-eighths threshold is among the highest supermajority requirements for any California ballot measure, so even modest tweaks to the pay formulas or insurance rules face a steep climb.
Voters could overturn or modify Prop 22 through a new ballot initiative, which requires enough signatures to qualify for a future election. No such measure has qualified as of 2026. The framework remains largely as voters approved it in 2020, minus the invalidated unionization-amendment provision.