Two San Francisco ride hailing companies – Uber and Lyft – are facing class action lawsuits from their drivers based on independent contractors misclassification. (Article Here) Both companies treat their drivers as independent contractors. However, those drivers have now brought class action lawsuits in an effort to get all drivers reclassified as employees. While it is well-known that classification as an independent contractor changes ones tax status, it also is an essential question into the rights of workers to the protections of the Federal Fair Labor Standards Act and California’s wage and hour laws.
The Uber and Lyft Lawsuits
Both Uber and Lyft are in the midst of litigating claims by their drivers that turn on whether the drivers were independent contractors or not. These cases are still pending before the court.
The Claims by Lyft Drivers:
The Claims Against Uber:
California’s Independent Contractor Determination
Independent Contractor Status Under the FLSA
1) The extent to which the work performed is an integral part of the employer’s business.
2) Whether the worker’s managerial skills affect his or her opportunity for profit and loss.
3) The relative investments in facilities and equipment by the worker and the employer.
4) The worker’s skill and initiative.
5) The permanency of the worker’s relationship with the employer.
6) The nature and degree of control by the employer.
Similar to California law, under the FLSA there are certain factors which are immaterial in determining the existence of an employment relationship. For example, a worker cannot sign away his or her status as an employee. Instead, it is the reality of the working relationship – and not the label given to the relationship in an agreement – that is determinative. Even a worker that has incorporated a business, or is licensed by a State or local government agency may be considered an employee depending on the employment relationship.
For more information or if you would like to speak to one of our San Francisco employment lawyers please contact us.