California Labor Official Finds Uber Drivers are Employees

There has been a growing debate between Uber and its drivers at to whether they are employees or independent contractors.   The company would like to have all drivers classified as independent contractors. This would mean they do not have to pay the workers any benefits, they do not have to pay overtime wages, they do not have to pay any portion of a worker’s federal employment tax, and they do not have to pay workers’ compensation if a driver is injured while driving for them.

applestuffIn addition to having to pay less money, the company can also claim it is not liable if an Uber driver is held responsible for a car accident that results in personal injury. There is a long-standing provision in our legal system, which holds employers liable for negligent conduct committed by their employees in many situations. However, if the worker is an independent contractor, there is generally no liability on behalf of the company paying the at-fault contractor.

As our Los Angeles employment attorneys can explain, misclassification of employment is a serious problem that can cost workers a considerable amount of money in wages, overtime pay, and benefits. It is also a problem that disproportionally affects the lowest paid workers, since these are the people who are often working on jobs where employers try to take advantage of them.   According to a recent news article from The Huffington Post, an official at the California Labor Commission has just ruled Uber drivers really are employees and not independent contractors.

As part of her ruling filed in the California state court, the deputy labor commissioner ruled petitioner was entitled to compensation for costs she incurred while driving customers for Uber. Normally, an employer pays for any costs associated with employment. For example, if an employee at a big box store has to mop the floor, his or her employer will provide the mop and bucket. If, on the other hand, you hire an independent contractor to come to your house and install a ceiling fan, he or she will be responsible for having the tools necessary to do the job. Since you are not an employer of the electrician, you are not responsible for providing his or her tools. This is the argument Uber was making when they tried to avoid costs by claiming all drivers were independent contractors.

This deputy commissioner obviously did not agree with Uber’s argument. She held Uber controlled the entire operation and was thus “holding the reins” in this employment relationship. Uber was claiming they were just a neutral technology provider, which allowed people who had cars to share rides with those who needed a ride. Essentially, Uber is holding itself out to be the same as Craigslist or another classified advertisement host. The deputy commissioner was also not swayed by this argument and said the company was clearly involved in every aspect of the operation.

However, it should be noted, the California Labor Commission has said it does not make rulings which are considered broad in scope, and these issues are handled on a case by case basis, though it is hard to see how the result would be different when the next driver files a similar claim.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.

Additional Resources:

Uber Driver Is An Employee, Not An Independent Contractor, Rules California Labor Official, June 17, 2015, Huffington Post

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Arlington v. Miller’s Trucking – Oral Wage Agreement Weighed, March 15, 2015, Costa Mesa Overtime Lawyer Blog

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