August 12, 2022
Update:
1,329 California Uber Technologies Inc Drivers will receive a cut of the $8.4 million deal approved by CA federal judge, Edward M. Chen, on Tuesday, August 9, 2022. The drivers claimed that Uber misclassified them as independent contractors, barring the employees from receiving certain wages and other benefits such as health insurance and paid time off. The Uber misclassification lawsuit was on behalf of the considerably few employees who opted out of the arbitration clauses in Uber’s employment agreement, and an impressive 72% of the class submitted claim forms for misclassification.
What is the difference between an independent contractor and an employee?
An independent contractor does work for a company but is not directly employed by that company. In the misclassification suit against Uber, the drivers’ representation argued their work was essential to the bottom line of the company. While many factors determine whether a worker is classified as an employee or an independent contractor, companies save money by misclassifying employees as independent contractors.
An independent contractor is not entitled to any of the protections granted by the employment and labor laws such as paid time off or health insurance. They are ineligible for workman’s compensation and any unemployment benefits.
The responsibility of the U.S. Department of Labor’s Wage and Hour Division is to administer and enforce worker protections like The Fair Labor Standards Act (FLSA), which was used to settle the 2022 Uber misclassification lawsuit.
When a worker believes they have been misclassified by their employer, they file a complaint that gets received by the Wage and Hour Division. The Division then makes a judgment based on many factors that determine if the worker is an employee or an independent contractor.
- The extent to which the services rendered by the worker in question are an integral part of the principal’s business.
- The permanency of the relationship.
- The amount of the alleged contractor’s investment in facilities and equipment.
- The nature and degree of control the principal has over the worker.
- The alleged independent contractor’s opportunities for profit and loss.
- The amount of open market competition with others is required for the success of the alleged independent contractor.
- The degree of independent business organization and operation.
Get in touch with Khanuja Law and request a Free Consultation if you believe you have been misclassified and are entitled to worker protections.