Uber Relieved or Uber Mad? What Does the Recent UBER Misclassification Ruling Mean for Employers?

Ervin Cohen & Jessup LLP
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Last week, the California Labor Commissioner ruled that Uber driver Barbara Berwick was an employee and not an independent contractor, as Uber classifies all its drivers. The ruling was based on the Labor Commissioner’s determination that Uber was involved in “every aspect of the operation”. Uber vets drivers, requires them to provide personal banking, Social Security and address information, conducts DMV and background checks, cuts off inactive drivers after a certain number of days and only allows drivers to use registered cars that are less than 10 years old.

Berwick was awarded more than $4,000 for expenses incurred as an Uber driver. Employees are entitled by statute to reimbursement of their work related expenses, independent contractors are not.

However, although this Berwick ruling is not a good omen for Uber, it does not set precedent for any other cases and Uber has already appealed it. When the San Francisco Superior Court hears the appeal, it will review it anew and will not be bound by the Labor Commissioner’s decision.

Meanwhile, Uber is also appealing a ruling from a Florida agency that said a driver is an employee, while pointing out that a few years ago, a different California labor commissioner ruled that a driver was an independent contractor as did labor commissioners in Colorado, Georgia, Illinois, Pennsylvania, Texas, and New York.

The judicial system is notoriously slow and there is no telling which of the many pending Uber cases will be the one that sets a final legal precedent. While the cases are winding their ways through the courts, of course, it’s equally possible that Uber will exert some of its billion dollar wealth toward lobbying for legislative change in its advantage, and this may moot the issue.

For now, though, buckle up and come along for the long ride.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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