On June 16, 2015, the California Labor Commissioner’s office ruled that Uber drivers are employees, not independent contractors. The ruling is expected to have a major impact on how the ride-sharing service operates in California, now that it will be expected to treat drivers like employees.
The California Labor Commission found that because of the level of oversight Uber exercises, one San Francisco-based Uber driver in particular is an employee protected by state and federal labor laws. This means the driver is entitled to benefits and other wage and hour requirements which independent contractors are not entitled to.
One way Uber is really involved in driver oversight is by conducting background checks on drivers. Uber also requires drivers to share their social security numbers, banking information, and addresses. Drivers are also not allowed to drive cars over ten years old. These are all examples of how the company exercises a level of control over drivers that amounts to an employer-employee relationship.
Uber is appealing the decision, which requires it to pay the plaintiff $4,152. Uber claims that in the ride-sharing business, its role is nothing more than a “neutral technological platform,” designed to enable passengers and drivers to transact business. The Commission, on the other hand, found that Uber is involved in every aspect of the operation, and is far more than just a middle-man providing a technological platform.
Technically, the Commission’s ruling applies only to the one plaintiff, but it is expected to have repercussions beyond just one driver. The reasoning behind the ruling arguably applies to Uber’s entire business model. On a grander scale, if all Uber-drivers are found to be employees, Uber could be required to reimburse them for work-related expenses (such as gas) and overtime. The company will also have to pay unpaid social security, unemployment insurance, workers’ compensation contributions, and possibly penalties for late payment of these benefits.
Sacramento, CA 95821