State Ballot Initiatives Bring New Workforce Regulations

During the national election several state ballot initiatives represent substantial changes to key workplace policies regarding the classification and treatment of independent contractors in the “Gig” economy, individual privacy rights, higher minimum wage thresholds, paid leave expansion, and cannabis legalization. Here are summaries of some of these important ballot initiatives affecting employers.

  • California Proposition 22, App-Based Drivers as Contractors and Labor Policies Initiative – Proposition 22 considers mobile application-based rideshare and delivery companies to be independent contractors rather than employees. This ballot initiative does not affect other types of workers who are subject to California Assembly Bill 5 (AB 5). In addition to defining app-based drivers as independent contractors, Proposition 22 enacts certain labor and wage policies applicable to app-based drivers and companies, including:
    • Payment of the 120% of the minimum wage for engaged time
    • Health benefits subsidy payments
    • Insurance (accident, disability, etc.)
    • Antidiscrimination and sexual harassment policies
    • Training programs (driving, misconduct, etc.)
    • Zero-tolerance policies for drugs or alcohol
    • Criminal background checks for drivers

This initiative establishes a significant exemption from California’s expansive definition of employment under AB 5. It also establishes a precedent for a third category of workers for platform-based or app-based “Gig economy” workers, in addition to employees and independent contractors.

  • California Proposition 24 Consumer Privacy Rights Act (CPRA) – The Proposition 24 ballot initiative creates a new California Privacy Protection Agency to implement and enforce the CPRA and exempts employment-related and business-to-business data through 2022. It expands on the Consumer Privacy Act, such as allowing consumers to prevent businesses from sharing personal information, correct inaccurate personal information and limit businesses’ use of sensitive personal information including geolocation, race, ethnicity and health information. Companies are required to update their California privacy programs to include as a new category of personal information, “sensitive data,” which includes government identifiers, account and log-in information, geolocation data, race or ethnic origin, religious beliefs, etc.
  • Colorado Proposition 118, Paid Family and Medical Leave Insurance – Proposition 118 creates a new Paid Family and Medical Leave program for Colorado employees. It will provide 12 weeks of paid leave, with an additional four weeks available in specified circumstances. This program will be administered by the Colorado Department of Labor and Employment.  Beginning in 2023, employers will pay a payroll tax of 0.9 percent of wages, split evenly between employers and employees. After 2024, the tax rate will be reset based on aggregate benefits paid in the prior calendar year. Businesses with less than 10 employees are exempt from the employer share (i.e., will pay only the 0.45 percent withheld from employees).

Beginning in 2024, Individuals will be eligible for benefits after they have earned $2,500 and have been employed for at least 180 days.

  • Florida Amendment 2, $15 Minimum Wage Initiative – The Florida state minimum wage, currently $8.56 per hour, to $15.00 per hour in 2026. Increases are graduated, as follows:
    • $10.00 effective September 30, 2021
    • $11.00 effective September 30, 2022
    • $12.00 effective September 30, 2023
    • $13.00 effective September 30, 2024
    • $14.00 effective September 30, 2025
    • $15.00 effective September 30, 2026

The minimum wage will be adjusted annually thereafter based upon the Consumer Price Index.

At this time, 29 states currently have a minimum wage above the federal minimum wage of $7.25. In addition to Florida, several states including California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey and New York have laws that will eventually raise the state minimum wage to $15 per hour. The District of Columbia adopted a minimum wage of $15 beginning July 1, 2020.

  • Five states legalize either medical or recreational cannabis use – Arizona, Montana, and New Jersey voted to legalize recreational marijuana. Voters in Mississippi and South Dakota decided to legalize medical marijuana. Some of these latest ballot initiatives also contain guidance for employers. Other states plan to develop more specific guidance. Despite cannabis legalization laws in many states, cannabis is still illegal under federal law.

For more details regarding these regulations and to determine how this information affects your company lease consult your legal counsel.