Independent contractor status harm most workers
With nearly $200 million in funding from app-based companies like Uber and Lyft, California’s Proposition 22 was voted into law by Californians. It is now legal for these app-based companies to classify their drivers as independent contractors (ICs). This means that these drivers are no longer covered by the protections of Assembly Bill No. 5, namely:
• No right to minimum wage, thus no right to be paid for each and every hour worked
• No right to overtime pay for working more than 8 hours per day or 40 hours per week
• No right to be reimbursed for business-related expenses
• No right to meal breaks and rest breaks during work
• No right to the employer’s share of the social security, unemployment and
disability taxes (and no right to collect these benefits if fired or laid off)
• No state workers’ compensation protection if injured at work
• Not entitled to additional benefits such as sick pay, retirement and profit-
sharing plans
• No protection from wrongful termination of employment
• Limited protection from discrimination
If you are not an app-based driver and your employer tells you that you benefit from being an independent contractor because of purported “flexibility” in setting your work schedule, think of these important rights that you lose.
Yes, you lose and employers win when they deny your true status as an employee.
Consider the money that employers save when they avoid their obligations to provide these protections. For example, they avoid paying certain taxes that go toward, unemployment, disability, and Social Security. The UC Berkeley Law Center reports that between 2014 and 2019, if Uber and Lyft had classified their drivers as employees, these companies alone would have paid $413 million into California’s Unemployment Insurance Fund.
For now, Proposition 22 only applies to app-based drivers. But other industries are expected to try a similar approach. Especially vulnerable are workers who work in healthcare such as caregivers and other personal attendants, truckers, temporary workers, and on-call workers. Even now, many of these workers are asked to sign an Independent Contractor agreement (and issued Form 1099 for taxes) even though they may not have been lawfully classified as ICs.
True independent contractor status is determined by law, not by contract. The most important factor that determines IC status is the employer’s right to control the worker’s job. If the employer directs the employee on what tasks to accomplish and how to accomplish these tasks, then the worker is an employee. Classifying them as independent contractors is illegal.
Our law firm understands that workers are harmed when misclassified as ICs. That’s why we continue to fight in court for these workers, either in individual claims or class actions, often in David-versus-Goliath settings. The law, however, has allowed us to recover significant amounts of back wages for these misclassified workers.
For workers in the non-app-based companies, your rights remain protected. We will continue fighting for you.
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The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of the Asian Journal, its management, editorial board and staff.
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Atty. C. Joe Sayas, Jr. is a Los Angeles-based lawyer. He has devoted his more than 25-year litigation career to protecting workers’ and consumer rights. He has fought for employees discriminated due to disability, race, or sex, including thousands harmed by employer wage theft in both individual and class actions.