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Home Affordable Care Act California Doubles Down on Its Gig Economy Worker Misclassification Challenge. Learn How That Could Affect Your ACA Compliance

California Doubles Down on Its Gig Economy Worker Misclassification Challenge. Learn How That Could Affect Your ACA Compliance

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by Maxfield Marquardt

3 minute read:

California is doubling down in its battle against the gig economy. The California Labor Commissioner’s office just announced that it filed a lawsuit against Uber for misclassifying its workers as independent contractors. This follows two months after the California Attorney General, along with the city attorney’s offices of Los Angeles, San Diego, and San Francisco filed their own complaint, which “accuses Uber and Lyft of depriving workers of benefits, such as a minimum wage, health care, overtime pay, reimbursement for business-related expenses, access to disability insurance and paid sick leave,” according to Forbes.

The Attorney General’s lawsuit seeks restitution in unpaid wages for drivers as well as action from the companies to treat their drivers as employees moving forward. As reported by The LA Times, “The law enables plaintiffs to seek up to $2,500 in civil penalties per violation for drivers going back four years.” The new lawsuit filed by the California Labor Commissioner’s office also seeks lost wages and other state-mandated employee benefits.

These lawsuits follow the implementation of AB 5, which became effective on January 1, 2020. AB 5 explicitly adopts the ABC test for determining whether a worker can be appropriately classified as an independent contractor. Ultimately, recent events present increasing complexities for the identification of workers in the gig economy.

Read on to learn more about why AB 5 is so controversial.

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Summary
California Doubles Down on Its Gig Economy Worker Misclassification Challenge. Learn How That Could Affect Your ACA Compliance
Article Name
California Doubles Down on Its Gig Economy Worker Misclassification Challenge. Learn How That Could Affect Your ACA Compliance
Description
With new legal developments and pressures for employers in gig economy misclassification, ACA compliance is getting more complex.
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Publisher Name
The ACA Times
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