California Sues Uber and Lyft Over Worker Misclassification

This week, the California Attorney General filed a lawsuit against Uber and Lyft for allegedly misclassifying their workers, potentially depriving them of benefits during the coronavirus pandemic. A ruling in the California Supreme Court in 2018 created a new test for who is considered an employee or an independent contractor that could potentially require tech companies like Uber and Lyft to classify many former gig workers as employees. If you work for a ridesharing company and have been deemed an independent contractor, you may be entitled to benefits. Talk to an experienced California employment law attorney today to learn more about your legal options.

Uber and Lyft Reactions

Both ridesharing companies have argued since the 2018 court ruling that their workers are correctly identified as independent contractors, with Uber even releasing a statement after the court case explicitly stating that they would continue to treat its drivers like contractors. However, the fallout from the COVID-19 pandemic in California has put pressure on the debate as to the obligations of these companies to provide and protect their drivers. By maintaining their status as independent contractors, Uber and Lyft do not have to provide paid sick leave or unemployment insurance benefits to their drivers.

Opponents of the new employee classification test claim that maintaining independent contractors as gig workers will help the economy and allow workers to earn money. Uber has promised guaranteed minimum earnings and new benefits to its independent contractors, but the state has claimed that it is not enough.

California’s Response to Rideshare Companies

The debate over the classification of workers intensified after the companies encouraged their drivers to seek unemployment benefits from the new federal fund, even though Uber and Lyft do not pay taxes in California that support the state’s unemployment insurance benefits. The state Attorney General echoed these concerns in his press conference, attacking Uber and Lyft for attempting to avoid hundreds of millions of dollars in benefits to their employees, even while they expose themselves to infection by continuing to drive during the pandemic.

The new legislation, known as AB 5, which enforces the new employee classification rule also provides city attorneys the power to enforce the rule within their municipalities. The San Diego city attorney has already won a case that classifies Instacart delivery people as employees, and now the state attorney general along with the city attorneys for San Diego, Los Angeles, and San Francisco are looking to do the same with Uber and Lyft statewide. If it is found that Uber and Lyft have misclassified their workers as independent contractors and not as employees, they could potentially be penalized with a $2,500 fine for each violation.

Talk to an Employment Law Attorney

If you believe that as a gig worker you have been misclassified as an independent contractor instead of as an employee, you may have a claim for benefits that could significantly help your financial situation during the coronavirus pandemic. Talk to an experienced California employment law attorney today to learn more.