California Prop 22 and the gig economy.

California Prop 22 was on the ballot this year, letting voters decide if gig workers could remain classified as independent contractors. The proposition was a follow-on to California Assembly Bill 5 (AB5) which required companies to reclassify their gig workers as employees.

Many gig workers lost their positions under AB5 as companies declined to take on the costs of converting them to permanent hires with a salary and benefits. Companies like Uber, Lyft, DoorDash and Instacart sought to reclassify their drivers back to independent contractors. The result was Prop 22 and a quest to save an increasingly important labor force in today’s marketplace.

According to Yahoo Finance, Prop 22 would afford independent drivers with mandated health payments, disability insurance and an earnings guarantee. Some gig workers were against Prop 22, seeking instead to be classified as employees and receive the many benefits of a permanent job. The initiative ultimately passed with a 58% majority, keeping the independent contractor/driver model intact.

This legislation is expected to have a ripple effect across the nation and its 57 million gig workers, who contribute more than $1 trillion to the U.S. economy each year. Rebecca Henderson, CEO, Global Businesses and executive board member at Randstad, says she is working closely with companies that are reassessing the role of independent contractors as part of an integrated workforce.

“With more jobs to choose from, gig workers will want to work for the company that can provide them with the most appealing offer,” writes Henderson in an article for Morning Consult. “Employers should be investing in workforce management technology and most importantly, their own employer value proposition, to attract and retain talent in 2021 and beyond.”

Read the articles in Yahoo Finance and Morning Consult to learn more about the gig economy in the United States. You can also get your exclusive copy of the MSP playbook to learn about enhancing your contingent workforce management strategy to drive greater business values.