Attorney Gen. Files Lawsuit Against Uber For Worker Classification
California AG Xavier Becerra, along with city attorneys from LA and SF filed a lawsuit this year asserting Uber and Lyft gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors.
The suit argues against the Uber and Lyft duopoly and claims that the companies are depriving workers of the right to minimum wage, overtime, access to paid sick leave, disability insurance and unemployment insurance. With this claim, the lawsuit is seeking $2,500 in penalties for each violation. Every violation could mean every driver. This is a violation under the California Unfair Competition Law with an additional another $2,500 for violations against senior citizens or people with disabilities.
“The companies, we believe and argue, are shirking their obligation to their workforce,” Becerra said in a call today. By shirking those obligations, Becerra said, Uber and Lyft are shifting those costs to California taxpayers.
“American taxpayers end up having to help carry the load that Uber and Lyft don’t want to accept,” Becerra said. “These companies will take the workers’ labor, but they won’t accept the worker protections.”
Uber has chosen to contest this lawsuit in court. The company believes that after the COVID-19 crisis, the company needs to make it easier, not harder, for people to quickly start earning or drive as a part-time job to bridge the gap between their next job. There are millions of people in the US that are currently out of work and for this major reason they want to contest this action in court.
Uber and Lyft have historically spent millions of dollars to try to combat California law AB 5, which makes it harder for tech companies to classify workers as independent contractors. The new law codifies the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles.
This ruling follows the ABC test which companies can perform on all their workers to determine whether to legally classify them as employees independent contractors. To be indepdentent, the three-part test says that the company must prove the worker is free from the control and direction of the hiring entity, performs work outside the scope of the entity’s business, and is regularly engaged in an “independently established trade, occupation, or business of the same nature as the work performed.”
Uber and Lyft are proposing a ballot initiative which will implement an earnings guarantee of at least 120% of minimum wage while on the job, 30 cents per mile for expenses, a healthcare stipend, occupational accident insurance for on-the-job injuries, protection against discrimination and sexual harassment and automobile accident and liability insurance.
Though, “they’re not going to succeed in any of that because voters are too smart for that,” Los Angeles City Attorney Mike Feuer said on the press call today.
“This is a big win for drivers,” driver and organizer with Gig Workers Rising Carlos Ramos said in a statement. “Billionaires like to pick and choose what laws they follow. Today, California is showing that no one is above the law, not even big tech. This is a win for workers and for organizing.”
Organizations like Gig Workers Rising have been calling legislators to enforce the AB5 into law since it went into effect in January. This suit has been taken up with very high speed due to the COVID-19 pandemic and this hioghlights the danger of work that these essential workers are doing out on the streets every day.
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