Uber and Lyft Must Begin to Classify Their Workers as Employees

Uber and Lyft must begin to classify their workers as employees, with all the protections and benefits of employees.

This Monday, a California judge ordered Uber and Lyft to classify their workers as employees. The initial order was issued after authorities sued two state riding companies for refusing to comply with state law.  

• California Attorney General Xavier Becerra led the charge against the technology companies.
• Uber and the Lyft want their drivers to be independent contractors.
• Judge Schulman said the Uber and Lyft Act should be adhered to, even if it is difficult.
• Uber announces new safety regulations, requiring drivers and riders to wear masks

If confirmed, the ruling could pose a major financial threat to Uber and the Lyft companies, which have so far avoided paying for workers’ benefits.

Legislative Bill 5

The “Kick Workers Bill” or Legislative Bill 5 is an extension of the California Supreme Court’s 2018 ruling. 

In that conclusion, the court compelled the companies to use the three-node test in determining the classification of a worker. Legislative Bill 5 refers to that judgment. 

But even though they have not put the law in writing, recent months have made it clear the difference between kick workers and full-time employees.

The COVID-19 strikes have affected kick workers, especially those working in ride-sharing companies, who have been suspended several times amid the epidemic and have resumed operations. 

Due to the normal nature of kick contracts, those workers struggle to get unemployment and other benefits when their regular day job is not available. 

While most companies offer benefits to their full-time employees, independent contractors and kick workers receive nothing.

Uber and Lyft refuse to comply

Uber and the Lyft have a business model that has been saving money for years without providing benefits to their drivers. This is why both companies tried and failed to block Assembly Bill 5 at every step and failed. 

In January this year, the bill was passed.

Now, under a California judge’s bill 5, Uber and Lyft must begin to classify their workers as employees, with all the protections and benefits of employees. This ruling allows ten days for any company to appeal, which is possible.

For their part, Uber and Lyft are afraid of their basement. Companies will have to pay overtime pay, FICA tax and health benefits if the verdict progresses.

Forcing their hand

California Attorney General Xavier Becerra led the charge against the technology companies. City attorneys from San Francisco, Los Angeles and San Diego also signed the resolution. The lawsuit alleges that Uber and Lyft both violated a court order and obligated their drivers to restructure.

For now, they have reached their first goal. San Francisco High Court Judge Ethan Schulman issued a preliminary restraining order this week. This judgment serves as a time limit for companies. 

At least until the end of the debate, Uber and the Lyft should classify their workers as employees.

In response to the judgment

Uber and the Lyft want their drivers to be independent contractors. They argue that this ruling will affect drivers who cannot become full-time employees. 

Also, as a result of the current epidemic, more people than ever before are looking for some part-time jobs to offset their income. The ruling denies part-time employees the opportunity to drive an Uber or Lyft.

Judge Schlumman acknowledged that some drivers could be adversely affected in this way. But this negative impact “magnified only by the defendants” is a long and shameful refusal to comply with California law.

In the end, Judge Schulman said the Uber and Lyft Act should be adhered to, even if it is difficult. “Defendants should not avoid legislative orders because their businesses are so large that they can affect the lives of many thousands of people,” he said.