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California gig economy worker? You may be an employee

| Dec 1, 2020 | Employment Law

If you drive with Uber, Lyft or another “gig economy” company, you may not be an independent contractor. Instead, you may legally be an employee of the company you’ve been working with. A California superior court judge has ruled that the contract drivers for Uber and Lyft are entitled to the job protections and benefits other employees of the company get.

If you are legally an employee, you could be entitled to:

  • The minimum wage
  • Premium overtime rate
  • Unemployment and disability insurance
  • Workers’ compensation insurance
  • Employer-paid payroll taxes
  • The protection of employment laws like the Fair Employment and Housing Act
  • Employer-sponsored benefits like health insurance
  • Reimbursement of employment-related expenses
  • Other important benefits

A law called Assembly Bill 5 went into effect this year, and it confirmed that drivers for ride-hailing companies are legally employees. In the past, Uber, Lyft and the like had argued that they don’t hire drivers at all. They said they merely provide a platform that allows willing drivers to meet willing passengers.

The superior court judge ruled that the companies’ arguments were circular and would allow technology companies to deprive “legions of workers” of basic state labor law protections. Instead, the judge found that drivers are central to Uber’s and Lyft’s business models.

The case in which the ruling occurred is ongoing, but the judge ordered Uber and Lyft to begin classifying their drivers as employees right away.

An Uber spokesperson commented that “the vast majority of drivers want to work independently” and suggested that the requirement to classify the drivers as employees would be a job killer. Lyft said in a statement that their drivers do not want to be employees.

Both companies have announced they will appeal.

I don’t work for Uber or Lyft. Am I an employee?

It depends. Many jobs are exempt from AB 5. However, it is possible to determine whether you are more likely to be an employee or a contractor. Under AB 5, most workers are employees unless the hiring entity demonstrates all of these three things:

  1. Under the contract and in reality, the worker is free from the hiring entity’s control or direction when it comes to the performance of the work.
  2. The work performed is outside the usual course of the hiring entity’s business
  3. The worker is customarily engaged in an independently established trade, occupation or business that is of the same nature as the work being performed under the contract

Think about your job. Does the company you work with control the details of your work, or do you have the control? Are you doing something that is core to the company’s business, or are you doing something that the company generally doesn’t pay employees to do? Did you have your own business established before you started working with the company?

In a case where you have long had your own business, the work you do is outside the company’s main business and you have significant freedom over the details of when, where and how the work will be performed, you may legitimately be an independent contractor. Otherwise, there is a good argument you are an employee.

What should I do now?

If you have been treated as an independent contractor when you should have been considered an employee, you may be missing out on significant job protections and benefits. Talk to an employment law attorney about what steps to take.