News

Uber Drivers: Employees or Independent Contractors

By: Mikkie Schiltz

It seems like every week, a news story surfaces talking about Uber, the infamous ride-sharing service. Bloomberg Business caught my eye with one such story, entitled “Uber Judge Taps Brakes on California’s Drivers’ Suit Outcome.” The article discusses the implications of the lawsuit California Uber drivers filed against the company lobbying to be treated as employees. The article states, “A victory for the drivers seeking the pay and benefits of employees rather than independent contractors threatens to upend the ride share company’s business model and cut into its more than $60 billion valuation. Experts have said the stakes in the lawsuit grew by hundreds of millions of dollars as a result of the Dec. 9 ruling.” In other words, Uber drivers want to be treated like employees; Uber says no, and a lot of money is at stake.

This Uber lawsuit brings up several ongoing issues regarding whether individuals working for a company are independent contractors or employees.  To determine whether an individual is an employee, courts look at many factors, including control a company exerts over an individual.  If an individual is an employee, a company has many potential liabilities, including:

  • Obligations to provide benefits, including health insurance under the Affordable Care Act;
  • Requirement to provide worker’s compensation insurance;
  • Minimum pay and overtime compensation (companies must make sure individuals are paid minimum wage and overtime for any hours worked in excess of 40 hours/week);
  • Tax withholding and payment of employment taxes and unemployment taxes;
  • Liability for negligent acts of the employee performed within the scope of their employment (in Uber’s case, if the drivers are employee, Uber could be found liable for any negligent acts such as car accidents and be responsible

If the drivers win this case, it will open the door for discussion across the globe for Uber’s 160,000 plus drivers. What do you think: are Uber drivers employees or independent contractors?

Mikkie practices litigation, education, and employment law at Lane & Waterman. Learn more about her work: https://www.l-wlaw.com/attorneys/mikkie-r-schiltz/.