Make sure to check out our webinar, "Surviving Your Next Workers’ Comp Audit," on June 9 at 12:00 p.m. Eastern Time, presented by Matthew Fulton & Lynda Artesani. Register here.
Back in April I wrote another Work Comp Wednesday feature on 'Gig Work & Workers' Comp' citing the number of gig workers in the economy (at least prior to COVID-19) and how some states had begun the challenge of 'Gig positions' in terms of their status as Independent Contractors for a variety of reasons. I noted that one result of these challenges would be the imposition of workers' compensation requirements and costs if the independence of such 'gig workers' was in fact determined to be contrary to statutes of the states making such challenges.
Since that article, on May 5th, the California Attorney General and the Los Angeles, San Diego and San Francisco City Attorneys have all filed a lawsuit in the San Francisco Superior Court that both Uber Technologies, Inc. and Lyft, Inc. are in violation of California law by classifying drivers as independent contractors. The lawsuit specifically asserts that the two companies are intentionally defrauding the State of California of millions of dollars of payroll taxes and failing to to provide minimum benefits to 'employees' (under California law) including minimum wage, expense reimbursements, and health care (including workers' compensation). They further allege that the citizens of the State of California will ultimately be required to pay the burden of these costs for Uber and Lyft ride-hale drivers who are not be afforded the same employee benefits as all other employees under California state law because of the wrongful classifications.
The litigation specifically also seeks to enforce something called 'Assembly Bill 5' which actually sets into the California state code a workers' compensation test that was set out in the California Court case of Dynamex Operations West v. Superior Court which ensured access to paid sick leave, disability, family leave and unemployment insurance. The Public Officials in this latest case are seeking injunctive action compelling both Uber and Lyft to immediately comply with the provisions of that law which means that all Uber and Lyft drivers would have to be covered by workers' compensation at the expense of Uber and Lyft in addition to being provided with the other benefits enumerated in the provisions of the code. Because they officials are seeking an 'injunctive action' the judge in this case could issue a decision on just that aspect of the lawsuit without requiring any other aspects of the case to be heard or ruled upon.
Uber has indicated that they will contest any action of the court that is unfavorable to the independence of its' workers in California. Lyft had previously indicated, prior to the filing of the action, they were willing to work with California public officials in attempting to work toward a mutual resolution of the differences between independent worker and employee status.
It now appears that none of the parties is willing to cave on their strongly held position that 'they are right'. The result is that the future of Gig Work, at least for a large percentage of the population who defines that work as 'independent drivers' may end up being defined by initially state courts, then federal courts, and probably the U.S. Supreme Court in the long run.
Make sure to check out our webinar, "Surviving Your Next Workers’ Comp Audit," on June 9 at 12:00 p.m. Eastern Time, presented by Matthew Fulton & Lynda Artesani. Register here.
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