Los Angeles Uber and Lyft drivers – have you been improperly classified as independent contractors? Recently, the California Public Utilities Commission ruled that ride-sharing drivers with Uber and Lyft are employees under California’s AB5. AB5, which went into effect on January 1, 2020, makes it difficult for employers to classify workers as contractors rather than employees, a classification that exempts companies from paying for overtime, healthcare and workers’ compensation. If you believe you have been improperly classified, the law and our experienced employment lawyers are on your side and ready to help you achieve the workplace rights you are entitled to.

Independent Contractor vs. Employee

In California, the distinction between an independent contractor and an employee is an important one.

Independent contractors are workers in business for themselves who are usually free to work on multiple projects at the same time, and take jobs on a freelance basis. Generally speaking, they can choose when, where, and how they perform the work. Employees are workers who are employed by a business, person, or government entity.    The employer typically exercises a high degree of control over the wages, hours, or working conditions of the employee.

Additionally, employees have many legal rights that independent contractors do not. Those can include the right to overtime pay, meal breaks, and additional benefits, such as protections under federal and state law.

For example, the following rules apply to employees, but not to independent contractors:

·      employers must withhold state and federal payroll taxes for their employees

·      employers must provide workers’ compensation insurance for their employees

·      employees are eligible for unemployment insurance benefits from the state

·      employees are entitled to wage and hour protections, including minimum wage and overtime, and

·      employees are protected under federal and state antidiscrimination laws.

What Next

This worker classification issue is a hotly contested area of employment law in California. The CPUC decision will certainly not be the final ruling on the issue of whether Uber and Lyft drivers should be classified as contractors or employees. Uber has filed a federal lawsuit for injunctive relief to enjoin the enforcement of AB 5 against the company and its drivers. Lyft drivers have sued Lyft in federal court, seeking an order requiring Lyft to reclassify its drivers in California from independent contractors to employees.

For a free consultation about your legal rights as an independent contractor in California, contact the employment attorneys at LOEAB Law today.