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California’s Labor Commissioner Sues Uber, Lyft Over Employee Classification

California’s labor commissioner has filed a lawsuit against Uber and Lyft, presenting yet another challenge to the companies’ continued insistence that their drivers are independent contractors rather than ordinary employees.

And it is such purported mischaracterization which has led to Uber and Lyft being sued by state and local governments across the country. California—at various levels—has already taken Uber to court over its labor practices.

Now, the state Labor Commissioner’s Office has filed two lawsuits against both Uber and Lyft, alleging that the two companies effectively stole workers’ wages by considering them independent contractors.

The lawsuit, states CNN, seeks the recovery of “unpaid minimum wages for all hours worked, rest period wages, unpaid overtime wages, liquidated damages for minimum wage violations, itemized wage statement violations, penalties for failure to pay all wages due during employment and at separation of employment, and reimbursement for business expenses.”

A Lyft vehicle in Santa Monica, California, with the original grill-stache branding, since retired; image courtesy of Praiselightmedia via Wikimedia Commons, https://commons.wikimedia.org

The commissioner’s lawsuit, notes CNN, differs from prior legal action against gig employers. The lawsuit references Assembly Bill 5, which went into effect at the beginning of 2020 and requires businesses to prove that workers are sufficiently free from company control to qualify as independent contractors.

Furthermore, AB-5 mandates that independent contractors be classified as such only if they perform work outside the typical course of a company’s business.

Uber, as LegalReader.com’s noted before, has attempted to dodge the latter requirement by claiming that its corporate focus is on technology rather the actual provision of rideshare services. In effect, Uber and Lyft view themselves as entities which provide the technology to link independent drivers with prospective passengers—not businesses which strictly specialize in transportation.

Both Uber and Lyft have also claimed that their drivers simply do not want to be classified as employees, and prefer the freedom permitted by contracting—even if it comes at the cost of their income.

“The vast majority of California drivers want to work independently, and we’ve already made significant chances to our app to ensure that remains the case under state law,” Uber spokesperson Davis White said in a statement. “When three million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry.”

TechCrunch.com observes that California’s two lawsuits precede voting on Proposition 22, a ballot measure backed by Uber, Lyft, and other companies heavily reliant on so-called “gig workers.” Prop 22, if approved, would guarantee drivers at least 120% of the minimum wage, mileage reimbursement, and other benefits, including healthcare stipends and occupational insurance.

However, Prop 22 would keep drivers considered independent contractors.

The Yes on 22 campaign—which receives “support” not only from Uber and Lyft, but organizations such as the NAACP—claims that California should let voters decide contractors’ future.

“As this lawsuit clearly demonstrates, Sacramento politicians are more interested in the wishes of their special interest donors than the will of the vast majority of drivers and are intent on stripping drivers of the freedom to choose independent work,” Yes on 22 said in a statement. “This coordinated effort by all levels of government to run a politically motivated campaign will hurt the state at the worst possible time.”

 

Sources

California Labor Commissioner sues Uber and Lyft for alleged wage theft

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Uber and Lyft face new lawsuit from CA Labor Commissioner

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