Articles Tagged with worker misclassification California

New York State labor review board has made a move that could shake up the gig economy forever. The boardmisclassification lawyers of regulators recently ruled that three former Uber drivers qualify for unemployment insurance, a decision which first requires that the drivers be considered employees in the first place. According to a report from Forbes, the ruling would apply to all “similarly situated” workers, and the board ordered the company pay unemployment insurance benefits on behalf of the drivers.

Gig economy jobs have become popular in recent years, with companies like Uber, Lyft, Grubhub, and a myriad of other delivery and driving services taking the reins and reshaping the economy. Those desperate for a way to make ends meet that also allows for flexibility around an already packed work and family schedule have given these companies a robust labor force. Others who cannot find stable full-time work have thrown themselves into long days and nights trying to earn enough for a full-time wage. Their desperation, along with contractor loopholes, have created a sub-economy where workers are being stripped of many of the protections others enjoy. Turbo Tax-owner Intuit estimated last year that 34 percent of the American workforce is working in the gig economy, with many this year estimating the number to be closer to 40 percent.  Continue reading

A federal judge in California has refused to accept a proposed $100 million settlement in a class action lawsuit against ride-sharing service Uber, which is accused of misclassifying its drivers as independent contractors when they are, in fact, employees. drive7

The U.S. District judge in his order stated that the settlement was just 10 percent of what the drivers’ lawyers estimate the company would have to pay in legal fees. Plus, it only accounted $1 million for state penalties that could easily pile up to more than $1 billion. In light of these facts, the judge wrote, the settlement proposal was not fair to the workers, and neither was it reasonable or adequate.

It’s unclear what this and other cases are going to mean for the future of the company. The company’s fast-paced growth and low prices are contingent on the fact that it doesn’t have to pay its drivers fuel reimbursements or offer health insurance. But the company’s profitability is not the concern of the courts. The issue is whether more than 385,000 workers in California and Massachusetts (the parties to the lawsuit) were cheated out of these employee benefits by being wrongly classified. They argue the company had enough control over their day-to-day activities to be deemed employees – not independent contractors.  Continue reading