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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.
A court ruling that helps labor! Better go buy a lottery ticket, these things come around only once every hundred years!
and Florida, right, that liberal state down there.. Or did you not read the article?
Does EBAY, facebook, or youtube prevent you from selling your products if they dont like who you are selling them too? Or dont use specific things? methinks you did not read the article.
When you cant win, ad hominem.
A root of this issue is the 18th, 19th and 20th century concepts of employees / employers and an outdated set of definitions. Like so many modern issues near and dear, we will have to reassess out fundamental assumptions about all kinds of things, this being just one.
If I set my own schedule, and take as much time off as I choose, am I under an employer's control?
Can robots marry humans, and why would they want to aside from Scarlett Johansson?
Do women have the right to choose... how their FICA retirement savings is invested?
Pretending this is my office full of bitter coworkers..
Only if eBay is telling you what computer to use, when to use it , when you can list and what you can charge. Oh and they can dictate that you are not allowed to use competitive services while listing an item on their site. Not sure how Facebook and YouTube fit into this as they are services that you use for free via advertising.
False dichotomy. Many employees do not get benefits.
The real "Libtards" are the Libertarians!
Benefits is not the only distinction. I don't know the laws, but there are things like working full time and working for (or providing service to) only one company that make it murky. If Uber drivers drove for other companies as well the case might be different. Also, Uber provides insurance, which might be considered a benefit.
Personally, I think if a person wants to be a contractor and sets up his own business, he should be a contractor no matter what. But the law seems to not operate that way.
There are many reasons why drivers should be classified as employees rather than as contractors. The most obvious is that drivers don't price their own services. The labor laws were specifically written to protect people who are working for much more powerful companies which will treat them as serfs if they can get away with it.
"He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
According to the administrative law judge who heard the first appeal, Uber has sole discretion over fares, and can charge drivers a cancellation fee if they choose not to take a ride, prohibit drivers from picking up passengers not using the app and suspend or deactivate drivers' accounts. Based on that, "there was in fact an employer/employee relationship", according to the decision.
I don't know if that is sufficient argument to make someone an employee in the US (for purposes of taxation / benefits), but this is about there being an employer/employee relationship, which is not the same thing. There's a similar distinction here in the Netherlands, where freelancing is becoming rather popular. Internal Revenue considers someone to be a contractor ("entrepreneur") if they are free to set rates, and perform their assignments as they think best. If a client or an agency sets too many conditions and rules, the tax office may decide that there is in fact an employer-employee relationship. That doesn't make the contractor an actual employee, but it does entitle him for benefits, and also makes him and the employer liable for social security taxes.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Anyone who accepts restrictions from a company and yet doesn't want full labor protection of an employee is either totally naive about how tenuous their situation really is, or is experiencing desperation brought on by a totally shitty economy. Either way, I applaud the California decision, because corporations should not be taking advantage of either.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Easier said than done. If you stop doing business in California now, wouldn't you have to pay "severance" to all your "employees"? Besides, stopping doing business in protest is not the business-like thing to do. Working around the legislation is the business-like thing ;)
Personally, I think if a person wants to be a contractor and sets up his own business, he should be a contractor no matter what.
The issue here isn't about the degree of freedom from government interference a person has — it's how the regulations work when the client/employer (whichever the case may be) imposes too many restrictions on how the contractor/employee can do his or her job. In this case, Uber has been dictating too many terms to their contractors, to the point where the state of California determined that they were playing semantic games by using the word "contractor," i.e. the relationship they imposed on their drivers was employer-employee.
If you believe that ideally the relationship should have been client-contractor, that's not an issue of the law but rather what Uber feels it is within its rights to restrict. And ultimately that would require increased government regulation to change the contracts Uber writes, given that it is apparently unwilling to treat its drivers like actual contractors with the liberties that come with actually operating one's own business.
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.
There are all sorts of arguments about why Uber should or shouldn't have to act like a traditional taxi company. But in my opinion, that's less important than this question, for the broader economy and labor force. Social media, tech publications, and even the MBA rags have had all sorts of glowing stories about the "gig economy." Basically, they argue that the flexibility offered to workers by allowing them to string together contract jobs to make income outweighs the stability of traditional employment. Uber is cited as an example on the low end, day laborer style side, and of course, high flying "technology consultants" making $150+ an hour are put up as shining examples of why this should be the future of employment.
I'm far from a Luddite, but I'm a big believer in stability. Especially as you acquire a family and grown-up responsibilities, life in the US revolves around a steady income, health insurance and a way to save for retirement. The high-flying tech consultants can arrange for these things, but lately I've been seeing more of these cheerleading articles advocating for all employees to switch to this model. Most average employees don't have the motivation or skills to market themselves the way these consultants do, and they may lack the skills that would make them good contractor candidates.
It just seems to me that companies want a disposable labor force that they don't need to pay benefits, vacation, etc. for. Basically, they want to go back to a pre-Depression era where workers just turn up at the factory gates every morning and hope to get work. That may be appealing to Millenials who don't have any family ties and will move at the drop of a hat. If we have to go this way, then things like real estate transactions need to be streamlined, life has to be restructured around variable income levels, etc. and I think society isn't ready for it yet.
I don't see how uber could stop you from also having another job.
Uber wants all the benefits of being an employer with none of the responsibilities.
If you listen to Uber, every worker is an independent contractor and all the employee protection laws we fought so hard for over the last century don't apply any more.
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.
They simply fixed the glitch..
To Copy from One is Plagiarism; To Copy from Many is Research.
The company and its franchisees pull the independent contractor status all the goddamned time while doing all they can to violate California law - charging you for uniforms (illegal under CA law) deduction of tips from credit card purchases (illegal just about anywhere) refusal to pay mileage reimbursement (IRS law violation) and much, much more.
John Schnatter is a class-A business criminal and needs to be taken to task by the courts.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
I agree that this is true, but it does seem rather arbitrary to me. I am a proponent of the free market, but I do accept that people are often irrational. That said, I think the "solutions" to the problem of the irationality of people are often poorly thought out and often just make things worse.
The federal and California governments have a *general* policy that they want most workers to be employees, especially low level workers, because being a proper individual contractor is actually fairly complicated tax wise, and low level workers are the most likely to not realize things like the increased social security cost, meaning they're making less money than they thought they would, in addition to extra expenses like insurance.
Uber will probably be able to change this designation by changing up their terms of service a bit - giving more freedom to the drivers.
I don't read AC A human right