California Labor Commissioner says an Uber driver is an employee, not a contractor

Shocking News! (Really? Actually, no, not really.) Last night, Uber filed an appeal in San Francisco Superior Court.  The appeal is to challenge a ruling of the California Labor Commissioner that an Uber driver should be classified as an employee, not an independent contractor. Uber claims that its drivers are not employees; instead, Uber facilitates logistics for contractors who sign on to its service.   Drivers and passengers use the app for “private transactions.”   But behind that app is, well, a fleet of drivers: earlier this month, Uber announced it has 26,000 drivers in New York City, 15,000 in London, 22,000 in San Francisco, 10,000 in Paris and 20,000 in Chengdu, China. Uber’s position is that does not exert any control over the hours its drivers worked and does not require drivers to complete a minimum number of trips. The Labor Commissioner reviewed the ways Uber does act more like an employer – providing drivers with phones and deactivating the driver app if the individual is inactive for a period of time.  And when it comes to determining whether a worker is an employee or a contractor, the Labor Commissioner, the IRS, the EDD, etc., see the default to be an employment relationship when work is performed. What does this mean for  you – even if you aren’t a facilitator of private transactions? You should take a close look at any contractors you use. It is critical to review what the contractor is actually doing on behalf of your business and what rights the business has retained in controlling that “contractor.”

On June 18, 2015 I presented a webinar on independent contractors and the Uber case. You can view it at the HR Options webinar archive site here.   You can read more about the webinar here. For more on the Uber matter, the New York Times has a short article here with a link to the underlying ruling.

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