There has been plenty of controversy over the treatment of employees who are a part of the “sharing economy,” with much of the focus on ride-sharing giant Uber. New York state recently declared, with two decisions, that Uber drivers were in fact employees and were entitled to receive unemployment benefits.
Uber as well as similar service Lyft have long classified their drivers as private contractors, not employees. As a contractor, these drivers don’t receive the same lawful benefits and protections as an employee would; it’s often much cheaper for the company to hire a contractor than an employee with benefits which are an added expense to the employer.
The decision in both cases, however, only extends to the two drivers, not the rest of Uber’s contractors. In addition, the decisions allow both contractors unemployment benefits, but no other benefits a full-time employee would receive.
Employees versus contractors
The employment classification debate still rages on, with labor rights activists wanting a better safety net for workers. Meanwhile, Uber and other sharing economy companies claim that the personal flexibility of being a contractor and “their own boss” is what their drivers prefer.
Bhairavi Desai of the New York Tax Workers Alliance said that Uber has long relied on laws that turn “a blind eye” to what, if any, benefits they were giving to workers. The decisions in New York, he says, will ideally make the labor department to look a lot closer at how sharing economy companies treat their workers. Desai hopes that these rulings will extend to other Uber drivers and to other companies functioning with similar structure.
However, New York Labor Department spokesperson Tiffany Portzer says that these rulings are always on a case-by-case basis, and points out other misclassification rulings that have gone in favor of Uber.
Misclassification in California
We’ve previously written about the issues of misclassification with Uber and their employees in California. Recently, a class action lawsuit against Uber, with a proposed $100 million settlement, was overturned by Judge Edward M. Chen of the Federal District Court for Northern California.
The suit was brought against the company claiming that Uber classified their workers as private contractors rather than employees so that the company didn’t have to pay their drivers benefits and allow them legal benefits of an employee. Judge Chen overturned the suit because the settlement was “unfair and unreasonable,” said $100 million is too low an amount for the thousands of drivers who work for Uber and what their status as employees would be worth.
It’s very important as a worker in the sharing economy to work with a competent attorney who specializes in employment law and class action litigation. A knowledgeable lawyer will be able to help you pursue the right compensation for you if your rights have been violated at work in California.
