Whether a worker is classified as an employee or an independent contractor can have a significant effect on a person’s take home pay, as well as his or her entitlement to certain rights and benefits. For example, pursuant to the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to be paid at least minimum wage and receive overtime compensation at the rate of one and one-half times the standard rate of pay for all time spent working in excess of 40 hours in any one work week. Alternatively, independent contractors are not entitled to receive overtime compensation regardless or how many hours worked, and do not receive many of the benefits that come with employment.
Recently in a victory for Uber drivers, a California court has determined that these drivers should be classified as employees rather than independent contractors, similar to taxi cab or pizza delivery drivers. The court determined that because her work was “integral to” the company’s business, the company should pay her expenses.
The ruling stated Defendants are in business to provide transportation services to passengers,” Plaintiff did the actual transporting of those passengers. Without drivers such as plaintiff, defendants’ business would not exist.”
This ruling has the potential to affect a significant number of workers, with more than 1 million drivers used the app world wide, and hundreds of thousands throughout the United States. Legal observers note that this case could have a large impact on the ride sharing business as it is one of the first decisions applying the traditional “employee v. independent contractor” test to a company of this size, growth and consequence.
In this instance, the driver was seeking employment status in order to obtain reimbursement for expenses. The court relied on earlier rulings involving the status of cab drivers, and noted that “by obtaining the clients in need of the service and providing the workers to conduct it, defendants retains all necessary control over the operation as a whole.” This creates a “presumption of employment” unless Uber can prove otherwise.
For more information, or if you have questions please contact the experienced Atlanta wage and hour lawyers at Buckley Bala Wilson Mew LLP.