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California Overturns Uber's Appeal: Its Drivers Are Employees, Not Contractors
An anonymous reader writes: Uber's third attempt to overturn a California court ruling stating that its drivers are employees and not contractors has ended in failure, with the appeal dismissed by the California Employment Development Department (EDD). The California Labor Commission ruled in June on the matter, and in a later appeal one judge effectively decided that the difference between 'firing' a driver and deactivating their account is purely semantic.
False dichotomy. Many employees do not get benefits.
The real "Libtards" are the Libertarians!
Based on this reasoning, pretty much every franchisee ever is an employee, not an owner.
Take a close look at the ads sometime. See that asterisk? Follow it to the matching asterisk that says "prices may vary".
A franchiser often does set "recommended prices". And products, but the franchisee has some discretion, and that's the difference between them and employees.
Granted, when you're talking operations the size of McDonalds, there's not a whole lot of discretion allowed before they simply yank your franchise and give it to someone else, but that's the Free Market for you!
You're applying the logic backwards. Contractors do not receive benefits *because they are contractors*. The definition of a contractor according to the state of California: " 1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal; 2. Whether or not the work is a part of the regular business of the principal or alleged employer; 3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work; 4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers; 5. Whether the service rendered requires a special skill; 6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; 7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill; 8. The length of time for which the services are to be performed; 9. The degree of permanence of the working relationship; 10. The method of payment, whether by time or by the job; and 11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests." Uber pretty clearly violates 1, 2, most of 3, 6, and 7. Arguments can be made on others. A follow-up states: "Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288)" In this case, designating drivers as contractors is explicitly to get around legal requirements, such as needing to insure the drivers as commercial operators, being responsible for criminal actions of drivers during rides, paying employment taxes, etc. Some of those requirements are specifically created for exactly this kind of business activity (namely, taxi service), so in effect Uber wants to operate in a privileged position in an existing business environment for the reasons of "because". This is roughly analogous to so many companies designating IT workers (especially programmers) as "salaried exempt" in order to get around overtime laws. That went on for years until a few high-profile cases (specifically IBM) finally scared employers into obeying the law. Employers - or contract negotiators - don't get to decide these things unilaterally.
Why should it NOT be up to the individual to classify themselves at contractor or employee?
There are guidelines of when a person is a contractor and when they are an employee.
http://www.irs.gov/Businesses/...
It's pretty simple actually. For example, if your contractor must exclusively work for you as a person, then that is an employee, not a contractor. Contractors could replace themselves with someone else, their own employee, but that could be an issue in cases where contractor == person == employee.
If I hire a contractor to do my roof, I'm not hiring one person to smack nails through shingles. I'm hiring a company (which could be much more than 1 person), to do a job and I don't care who personally is on the roof.
The problem is not with people wanting to be contractors. The problem is with companies that want contractors for legal purposes, but treat them as employees internally. They want to skirt labor laws to squeeze extra money out of the employee.
While you are correct that not all employees get healthcare benefits (what is usually referred to as "benefits"), all employees get some benefits, which contractors do not. For example: social security contributions (which raise your rate in retirement), workers-comp insurance, and unemployment insurance. All of these things cost employers money, but the law assumes contractors will pay for themselves.
This is what Uber has been fighting so hard to avoid paying.