Uber Is Triumphant In California Misclassification Case
Uber made a huge stride in their favor at the top of March, when a California courtnamed them victorious in yet another misclassification case. The case surrounded once again classifications of Uber drivers as employees over independent contractors. The ruling was that Uber drivers are independent contractors. This is one of many instances where misclassification cases have popped up and shut right down.
For the last few years, Uber has come under fire for its practices with regard to drivers. As the Affordable Care Act mandates coverage for full-time employees of applicable large employers, Uber drivers clocking in full-time shifts have demanded healthcare.Further, they seek paid leave, expense reimbursement, and other benefits typically reserved for employees over independent contractors. In some cases—mainly through class action suits—the result has been settlements staggering into the hundred millions. However, in smaller case-by-case instances, Uber has shown clear wins.
In February, a Florida suit ruled in Uber’s favor, naming drivers as independent contractors. In California, however, the pendulum has swung in both directions. In 2015, courts ruled that Uber drivers in California were allowed certain benefits, though not having a firm stance on whether or not they were “employees” versus “independent contractors.”
That confusion continued in the Los Angeles courts in 2016 when an Uber driver Yosef Eisenberg attempted to recoup for damages stemming from several deactivations from Uber including low driver ratings, overcharging, and even sexual harassment. In November of 2016, the courts sided with Uber when Eisenberg attempted return compensation as an “employee” of Uber. He was found to be an independent contractor.
The reasoning was based on the idea that Uber does not control the driver’s schedule and therefore is not a part of an employer-employee relationship. Further, Uber has no employee handbook, no company cars, minimal training, no set schedule, no quantified ride guarantees, no supervision, no uniforms, and no non-competes among other factors. On February 21, 2017, Eisenberg’s claims were dismissed. Add to that the latest ruling in favor of Uber, and there is certainly something to be said about the direction of gig economy companies.
So what will this mean going forward? Companies that are a part of the gig economy will require more awareness of their practices and where their workers fall on the spectrum between employee and independent contractor. Sure, Uber is winning some of these cases outside of class action lawsuits, but the company is also a giant. Smaller scale companies taken to task for misclassification will find themselves in needless hot water should they not establish firm rules with those working with them. It’s a warning shot of the risks for employers who may have misclassified workers.
To learn more about ACA compliance in 2021, click here.
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