Big Ruling Regarding The Gig Economy

If you work in California, you are fortunate to have some of the strongest legal rights in the entire country. For most employees, this involves wage and overtime rights to stop employers from abusing workers with long hours and low pay. This includes a minimum wage, overtime pay when working over 40 hours, the right to take breaks, and the right to claim unemployment benefits.

There are, however, exceptions to these laws, including a massive exception regarding people who are classified as independent contractors, or self-employed. These people are not considered employees under the law and therefore wage and overtime laws do not apply to them. Sadly, the line between an employee and an independent contractor is dangerously thin—and questions must be raised as to whether employers are skirting the law with people who are actually employees. There is, in fact, a whole lot of abuse when it comes to this classification, and employers rely on people’s ignorance of the law to skirt the law.

For Uber and Lyft drivers, the independent contractor versus employee distinction is a big one, and a hot button issue for many drivers. It has been estimated that because they don’t treat drivers as employees, these companies save up to 30% by not paying wages, overtime, withholding taxes, unemployment contributions, or worker’s compensation. If you are a gig economy driver in California, a recent decision by the California Supreme Court may have significant implications for you.

In Dynamex Operations West v. The Superior Court of Ventura County County, the California Supreme Court was asked to consider a lawsuit by two delivery drivers against Dynamex, a package and document delivery company. Specifically, the drivers believed that they were being misclassified as independent contractors instead of employees, and that this deprived them of wage and overtime protections and violated the state wage order and the California Labor Code.

In the past, it has been incredibly difficult for people deemed independent contractors to challenge that classification. This is because for the last thirty years, California courts have reviewed these cases based on the level of control that an employer has over a worker. This standard has been generally favorable to employers.

In Dynamex, the attorneys for the drivers were able to convince the California Supreme Court to instead implement the “ABC test”, which starts out with a presumption that a worker is an employee, then examines if: (A) the worker is free of the employer’s control; (B) the work is not part of the employer’s normal course of business; and (C) the worker regularly engages independently established trade of the same type of work. The burden here is on the employer.

This is a truly monumental ruling for people wrongly classified as independent contractors. While nothing is settled or absolute, this absolutely opens the door for workers in the gig economy, such as Uber and Lyft drivers, to fight for their right to be classified as an employee.

Call Moss Bollinger

Moss Bollinger is an employee rights law firm. We handle all manner of employer violations, including wage theft, wage and overtime violations, claims of discrimination and retaliation, and employee misclassification. Employers know that they have the power in employer-employee relationships, since they cut the paychecks and have money to hire lawyers. If your employer is violating your legal rights, I can help you shift the balance of power. Contact Moss Bollinger. We can assess your situation and help you figure out whether you have a claim. We work on a contingency basis and only get paid if you do. Call Moss Bollinger today at (310) 982-2291 to schedule a free consultation or contact us online.