Employee or Contractor: Uber Case Provides Lessons on Misclassification

The ride-share company, Uber, is facing allegations of misclassifying employees as contractors. The suit provides lessons for Floridians in similar situations.

Companies throughout the country have faced prosecution for misclassifying employees as independent contractors in an attempt to cut costs. In some cases, the misclassification is obvious, in others it can be more difficult to determine. One of these more difficult cases is making headlines as ride-sourcing company Uber appeals a ruling from the California Labor Commission. Both NPR and Time ran pieces examining the ruling, noting the holding could have a major impact on the sharing economy. This could ultimately impact other sharing companies like Airbnb, Lyft and Instacart, a grocery-delivery company.

What Were the Details of the Ruling?

The case involves a driver for Uber who contended that she was an employee, not a contractor as alleged by the ride-share company. The commission heard the case and ruled in the driver’s favor. As a result, the company was required to cover the cost of mileage and reimburse her for the 6,468 miles she worked while employed for the company. She also received compensation to cover the cost of tolls, $256, and interest, $274.12. Ultimately, the commission called for the company to pay her $4,152 in expenses.

The ruling by the labor commission was filed in March and is non-binding. The information became public when Uber appealed the ruling to California’s court system. The court system currently has several similar lawsuits pending. The court’s decision could lead to a change in how these companies operate.

Will the Case Impact Florida Workers?

Although the case discussed above has its roots in California, similar cases of employers wrongfully classifying employees as independent contractors are present throughout the country, including here in Florida. Proper classification is important as there are legal distinctions between the two. For instance:

Hours. An employee generally works the hours set by the employer while a contractor has more control over the hours worked.
Benefits. Employees receive benefits like health insurance while contractors do not receive these benefits.
Dependency. Employees work as directed by the employer while contractors work more independently.

Employers in favor of labeling workers as independent contractors argue that workers are drawn to the freedom and independence they receive when classified as a contractor. However, employers may be motivated to wrongly classify employees in an effort to increase profits, as employers are not required to pay unemployment taxes or workers’ compensation for independent contractors.

Victim of Misclassification as an Independent Contractor? Legal counsel can help.

Remedies are available to those who believe they were wrongly classified as independent contractors. Contact an experienced employment law attorney at Feldman Legal Group to discuss your options and better ensure your rights and remedies are protected.