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California Says Uber Drivers Are Employees

June 19, 2015 | Daniel O’Connell, Esq.

The California Labor Commission has issued a ruling finding that an Uber driver is an “employee” and not an “independent contractor.” This ruling potentially paves the way for Uber drivers to file claims for workers’ compensation benefits not only in California, but perhaps in Georgia as well.

Uber headquarters in San Francisco
Uber headquarters in San Francisco

Barbara Ann Berwick, a former driver for Uber, had filed a complaint with the California Labor Commission seeking unpaid wages, reimbursement of expenses, and liquidated damages related to her time driving for the company. Uber’s attorneys had argued to the Commission that Berwick was not an employee, but rather an independent contractor. Independent contractors are by definition excluded from many worker protections, including the right to file a claim for worker’s compensation benefits.

Uber’s attorneys cited a number of factors that typically distinguish independent contractors from employees. Most of these factors have to do with the degree to which an employer has control over the time manner and method by which the worker performs the tasks for which they are being paid.  In making the determination as to whether a worker is an independent contractor or an employee courts also look at whether the tools used to perform the work are owned by the worker or the employer.

In Ms. Berwick’s case, the California Labor Commission rejected Uber’s argument that it exercised very little control over its drivers, finding that “[b]y obtaining the clients in need of the service and providing the workers to conduct it, [Uber] retained all necessary control over the operation as a whole.” The Commission also rejected Uber’s arguments that Berwick was not an employee because she used her own car. Instead it found that driving was an integral part of Uber’s business, and that without drivers such as Berwick, Uber’s business could not operate.

The Commission concluded that Uber is more than merely a “neutral technological platform” connecting riders with drivers; rather it found that Uber is involved in every aspect of the business operation and thoroughly vets prospective drivers. Uber also monitors its drivers’ performance rankings and cuts off a driver’s access to the application if a driver’s rating fall below a specific level. Finally, in reaching its decision the commission cited the facts that Uber has total control over the fee paid by a rider, and that without Uber’s tech application Uber drivers would be unable to perform the work in question.

Whether this ruling in California will have any impact on Uber or Lyft drivers in Georgia remains to be seen. It is important to note that the ruling in Ms. Berwick’s case does not yet apply to all Uber drivers, and it is not binding in Georgia. However, many of the arguments that Ms. Berwick was able to successfully use could be applied in a similar employee v. independent contractor dispute in Georgia.

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