Employee versus Independent Contractor: The Latest -

Courts have been dealing with the issue of whether a worker is considered an employee or an independent contractor for many years. The common law established specific rules, which have guided the courts for decades. S.G. Borello & Sons, Inc. v. Department of Industrial Relations. Among other factors to be considered under the common law test are whether the worker or the principal supplies the tools and instrumentalities for the work, whether the worker has a separate business, whether the worker is permanent or temporary and, most important, whether the principal maintains the right to control the worker in performing his or her assigned task.

But in the new economy, the common law tests may not work as well. A good example is a driver for Lyft or Uber. On the one hand, she provides her own vehicle and fuel, and sets her own hours. If she feels like going to Brazil for a few weeks, she can do that. If her passenger wants to be driven to the airport, she can take any route she prefers; she need not ask her supervisor the preferred route. She is also free to pursue other employment. In fact, many Lyft drivers also drive for Uber, which indicates that they are pursuing their own business. Based on these facts, the drivers seem to be independent contractors.