California’s labour commissioner has alleged, in separate lawsuits, that Uber and Lyft are committing wage theft by misclassifying drivers as independent contractors. This is the latest showdown for both companies against their home state.
The lawsuit says that the companies are depriving the drivers of “a host of legal protections in violation of California labor law” by classifying them as freelance workers.
“The Uber and Lyft business model rests on the misclassification of drivers as independent contractors. This leaves workers without protections such as paid sick leave and reimbursement of drivers’ expenses, as well as overtime and minimum wages,” California Labour Commissioner Lilia García-Brower said in a statement.
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García-Brower is aiming to recover wages owed to all of California’s Uber and Lyft drivers. She has reportedly received almost 5,000 claims for lost wages. The commissioner is also aiming to recover fees for a wide range of statutory violations and damages.
The classification of the drivers as contractors and not employees makes them ineligible for certain financial benefits. As employees, Uber and Lyft would have to pay them minimum wage, overtime compensation, and paid rest periods.
Both companies would also have to pay reimbursements for the cost of driving for the companies; this includes personal vehicle mileage. However, under the classification as independent contractors, the drivers receive none of these benefits.
Uber claims that the lawsuit is ill-timed because of the coronavirus pandemic.
“The vast majority of California drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under state law. When 3 million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry,” an Uber spokesperson said in a statement.
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