Slashdot Mirror
Limo Firm To Uber: You Misclassify Your Drivers As Contractors, Which Is Unfair (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: A Southern California limousine company sued Uber in federal court earlier this week, alleging violations of state unfair-competition laws. While a company suing Uber is not new, the proposed class-action lawsuit appears to rely on a recently decided California Supreme Court decision that makes it more difficult for companies to unilaterally declare their workers as contractors, which effectively deprives them of benefits that they would otherwise receive as employees.
In that case, known as Dynamex, the court came up with a three-part test to figure out whether companies can assert contractor status or not. The new case is called Diva Limousine v. Uber. Some legal experts say that the earlier decision in Dynamex may bolster an argument in this new case around unfair competition that has previously been difficult to win on in federal court. In short, Diva Limousine just might succeed where other federal lawsuits have failed.
In that case, known as Dynamex, the court came up with a three-part test to figure out whether companies can assert contractor status or not. The new case is called Diva Limousine v. Uber. Some legal experts say that the earlier decision in Dynamex may bolster an argument in this new case around unfair competition that has previously been difficult to win on in federal court. In short, Diva Limousine just might succeed where other federal lawsuits have failed.
This story is a RRSM (regularly recurring Slashdot meme), so lets get some facts straight. The IRS publishes a 20 point checklist to determine if someone should be an employee or contractor.
Every time this story comes up (about once a month) we get people claiming that ONE of those criteria is all that matters. This is nonsense. You need to look at all 20, and even then it isn't always clear.
There is also often an assumption that it is always "better" to be classified as an employee, and that Uber is screwing people buy not doing that. That is misleading. There are advantages and disadvantages to being either an employee or contractor.
Here is the list:
1. Profit or loss. Can the worker make a profit or suffer a loss as a result of the work, aside from the money
earned from the project? (This should involve real economic risk-not just the risk of not getting paid.)
2. Investment. Does the worker have an investment in the equipment and facilities used to do the work? (The
greater the investment, the more likely independent contractor status.)
3. Works for more than one firm. Does the person work for more than one company at a time? (This tends to
indicate independent contractor status, but isn’t conclusive since employees can also work for more than one
employer.)
4. Services offered to the general public. Does the worker offer services to the general public?
5. Instructions. Do you have the right to give the worker instructions about when, where, and how to work? (This
shows control over the worker.)
6. Training. Do you train the worker to do the job in a particular way? (Independent contractors are already
trained.)
7. Integration. Are the worker’s services so important to your business that they have become a necessary part of
the business? (This may show that the worker is subject to your control.)
8. Services rendered personally. Must the worker provide the services personally, as opposed to delegating tasks
to someone else? (This indicates that you are interested in the methods employed, and not just the results.)
9. Hiring assistants. Do you hire, supervise, and pay the worker’s assistants? (Independent contractors hire and
pay their own staff.)
10. Continuing relationship. Is there an ongoing relationship between the worker and yourself? (A relationship can
be considered ongoing if services are performed frequently, but irregularly.)
11. Work hours. Do you set the worker’s hours? (Independent contractors are masters of their own time.)
12. Full-time work. Must the worker spend all of his or her time on your job? (Independent contractors choose
when and where they will work.)
13. Work done on premises. Must the individual work on your premises, or do you control the route or location
where the work must be performed? (Answering no doesn’t by itself mean independent contractor status.)
14. Sequence. Do you have the right to determine the order in which services are performed? (This shows control
over the worker)
15. Reports. Must the worker give you reports accounting for his or her actions? (This may show lack of
independence)
16. Pay Schedules. Do you pay the worker by hour, week, or month? (Independent contractors are generally paid
by the job or commission, although by industry practice, some are paid by the hour.)
17. Expenses. Do you pay the worker’s business or travel costs? (This tends to show control.)
18. Tools and materials. Do you provide the worker with equipment, tools, or materials? (Independent contractors
generally supply the materials for the job and use their own tools and equipment.)
19. Right to fire. Can you fire the worker? (An independent contractor can’t be fired without subjecting you to the
risk of breach of contract lawsuit.)
20. Worker’s right to quit. Can the worker quit at any time, without incurring liability? (An independent contractor
has a legal obligation to complete the contract.)