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Home » Overtime & Minimum Wage Law » Are Uber and Lyft Dri­vers Employees?

Are Uber and Lyft Dri­vers Employees?

June 13, 2019 by Lisa Guerin

Photo of hands holding steering wheel of car to illustrate article on uber and lyft drivers
If you work in the gig econ­omy—pick­ing up pas­sen­gers, deliv­er­ing pack­ages, or drop­ping off gro­ceries or take-​out food, for exam­ple— you are most likely clas­si­fied as an inde­pen­dent con­trac­tor rather than an employee. On the plus side, this clas­si­fi­ca­tion means you can work when you want, tak­ing or turn­ing down jobs as it suits your sched­ule. Feel like earn­ing some extra money? Open an app, accept a gig, and step on the gas. Need a few hours or days off? Just check in when you’re ready to work again.

A lot of gig dri­vers like this free­dom—but it comes with sig­nif­i­cant down­sides. Unlike employ­ees, inde­pen­dent con­trac­tors aren’t cov­ered by work­ers’ com­pen­sa­tion if they get hurt on the job. Nor do they get unem­ploy­ment ben­e­fits if they are let go. And the com­pa­nies that hire them don’t have to pay a share of their Social Secu­rity and Medicare taxes, as they do for employ­ees. Con­trac­tors are not pro­tected by laws that pro­hibit work­place harass­ment and dis­crim­i­na­tion or reg­u­late health and safety. They can’t join unions. And they aren’t pro­tected by wage and hour laws, which guar­an­tee employ­ees the min­i­mum wage and over­time pay.

Gig Work­ers Fight­ing for Employ­ment Rights

The law gives employ­ees more ben­e­fits because it pre­sumes that they are more depen­dent on their employ­ers. On the other hand, a tra­di­tional inde­pen­dent con­trac­tor—like a painter, elec­tri­cian, or web­site designer—works for dif­fer­ent com­pa­nies, per­form­ing spe­cial­ized tasks only as needed. Typ­i­cally, con­trac­tors have the right and respon­si­bil­ity to:

  • dic­tate their own terms, such as pric­ing and scheduling
  • con­trol how and when to do the work
  • hire their own employees
  • carry their own insur­ance, and
  • han­dle their own taxes.

Against this back­drop, it’s easy to see why Uber and Lyft dri­vers, along with other gig work­ers, believe they should be clas­si­fied as employ­ees, rather than con­trac­tors. Ride-​sharing com­pa­nies like Uber and Lyft, for exam­ple, deter­mine almost every aspect of their dri­vers’ work, includ­ing what they can charge, the cars they can drive, the app they must use, and much more. Dri­vers have relied on these facts to file law­suits claim­ing that they are employ­ees, enti­tled to orga­nize unions, earn the min­i­mum wage and over­time, and claim unem­ploy­ment benefits.

Gov­ern­ment Opin­ions Are Mixed

So far, gov­ern­ment agen­cies and courts have mixed opin­ions on whether gig work­ers are employ­ees or con­trac­tors. Under Pres­i­dent Trump, fed­eral agen­cies (includ­ing the Depart­ment of Labor and the National Labor Rela­tions Board) have issued opin­ions find­ing that gig work­ers are inde­pen­dent con­trac­tors; these opin­ions over­ruled ear­lier guid­ance from the Obama admin­is­tra­tion on worker clas­si­fi­ca­tion.

How­ever, some courts have sided with the work­ers. In 2018, for exam­ple, the Cal­i­for­nia Supreme Court decided that dri­vers for Dynamex Oper­a­tions West, a doc­u­ment deliv­ery com­pany, were employ­ees rather than con­trac­tors. The Court relied on the ABC test, which con­sid­ers work­ers con­trac­tors only if all of the fol­low­ing are true:

(A) They are free from the con­trol and direc­tion of the hir­ing com­pany in per­form­ing the work, both in con­tract and in fact.

(B) They per­form work out­side the usual course of the hir­ing company’s business.

© They are cus­tom­ar­ily engaged in an inde­pen­dently estab­lished trade, busi­ness, or occu­pa­tion of the type they per­form for the hir­ing company.

Gig dri­vers will rarely pass part (B) of the test; the company’s busi­nesses are dri­ving and deliv­er­ies, which is pre­cisely what the dri­vers do. The Cal­i­for­nia leg­is­la­ture plans to cod­ify this hold­ing, which would make many Cal­i­for­nia gig work­ers employ­ees. We’ll have to see whether other states fol­low suit.

More Infor­ma­tion

To learn more about rights and pro­tec­tions for work­ers, see Legal Con­sumer’s wage and hour law learn­ing cen­ter.

Filed Under: Overtime & Minimum Wage Law Tagged With: employee, independent contractor, workers compensation

About Lisa Guerin

Lisa Guerin has covered employment law topics for Legal Consumer since 2014. After getting her law degree from Berkeley Law, she worked in government, public interest, and private practice, specializing in employment law. She was a legal editor and author at Nolo for many years, where she wrote or contributed to more than a dozen books, mostly on employment issues. She volunteers with groups that help shelter and rescue dogs, and she enjoys hiking with her own Very Good Boy in the San Francisco Bay Area.

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