misclassification

Effect of Tighter Independent Contractor Rules on California’s Small Businesses

December 26, 2019 | by Nassiri Law

A new law intended to make it harder for companies to misclassify workers as independent contractors rather than employees has been the source of much controversy and litigation – even though it doesn’t take place for another week.

Los Angeles employment lawyers know that while AB5 has a fair amount of detractors among mega-corporations like Uber (largely the kind of worker relationship model the law intended to target), small businesses that use freelance independent contractors are likely to be impacted too.

The designation of independent contractor has become a store point for lawmakers and labor advocates who argue many of these workers are doing jobs that should count them as employees, entitling them to certain valuable benefits like minimum wages, overtime, sick pay, workers’ compensation insurance if they’re hurt on the job or unemployment insurance if they’re suddenly laid off. Freedom from the responsibility of having to pay these expenses has proven an attractive prospect for many employers. But their designation isn’t the last say. It can be challenged – and increasingly is – since last year’s Dynamex decision by the California Supreme Court and now AB5, both of which strengthen worker protections and make it more difficult for companies to claim workers are independent contractors as opposed to employees. Continue Reading ›

Federal Judge Won’t Force Uber to Reclassify California Drivers as Employees

December 17, 2019 | by Nassiri Law

A federal judge in California declined to compel ridesharing company Uber to reclassify its drivers as employees, rejecting plaintiffs’ claims that the alleged misclassification of workers adversely impacts the state of valuable tax dollars due to public assistance spending for low wage workers.

Plaintiffs filed the motion for injunction by asserting it would benefit the general public. In an 18-page ruling in Colopy v. Uber Technologies Inc., the U.S. District Court for the Northern District of California declined to treat the motion as a “public injunction,” finding the case’s primary plaintiff, is seeking a private injunction, not a public one. He noted the Ninth Circuit Court of Appeals tends to disfavor class-wide injunctions in such cases, particularly where no certification has been awarded to the class. Further, he pointed out that many of Uber’s drivers in California had signed arbitration agreements upon employment, meaning most of the drivers in question wouldn’t be entitled to such relief anyway.

Plaintiff employment attorney argued the technology firm impacts not only its own drivers but the industry as a whole, thus negatively affecting a large number of workers by depriving them of employment rights as spelled out in the state’s labor code. Defendant lawyers meanwhile argued an injunction wasn’t needed because drivers would still have the ability to obtain damages for statutory violations after the resolution of the case. A preliminary injunction that would force the company to switch up its entire business model should be considered “extraordinary,” they argued. Continue Reading ›

FEHA Employment Discrimination Claims Against “Contracting Employer” May Be Valid

November 13, 2019 | by Nassiri Law

Independent contractors are entitled to far fewer rights under California employment law than employees or in some cases even job applicants. In filing an employment lawsuit against a company, one must establish they are an employee or prospective employee.

But as our Los Angeles employment attorneys know well, misclassification of employees as independent contractors is rampant. It’s often left to the court’s to decide.

Recently, a California appellate court ordered a new trial in the case of a worker who was technically a temp agency employee, but who took on a supervisory position for five years at the shoe care manufacturing company with which the temp agency contracted. Although the temp agency cut her checks, it was the manufacturer that had the direction and control of her day-to-day work. This, the court ruled, made her an employee for purposes of relief for alleged discrimination and wrongful termination under California’s Fair Employment and Housing Act.

Independent Contractor v. Employee

There is no set definition of the term “independent contractor,” which is why courts and enforcement agencies are often asked to consider the fact pattern of each case where employment status is a possible issue. The Division of Labor Standards Enforcement begins with the presumption that a worker is an employee, but it is one that can be rebutted by the employer. Continue Reading ›

New California Employment Bill on Independent Contractors Signed Into Law

September 18, 2019 | by Nassiri Law

With the stroke of Gov. Gavin Newsom’s pen, the sweeping California employment law limiting businesses’ use of independent contractors has become law and will go into effect Jan. 1, 2020.

Assembly Bill 5 had the overwhelming support of the state legislature, and the governor’s signature was widely anticipated, as his office had already voiced support for the measure.

Orange County employment lawyers know the goal is to reduce instances of worker misclassification, which is when employees are improperly designated as “independent contractors” rather than “employees,” which deprives them of a host of basic protections afforded to employees, such as:

Minimum wage;
Sick days;
Health insurance benefits;
Meal breaks;
Rest breaks;
Workers’ compensation insurance.

Ride Hailing Behemoths Try to Bargain With Workers Seeking Employee Benefits

June 17, 2019 | by Nassiri Law

Rideshare companies may compete fiercely on the road, but when it comes to classifying drivers as employees, they are rock-solid united. The CEOs of Uber and Lyft penned an opinion-editorial in the San Francisco Chronicle voicing opposition to a new California law that would re-designate their drivers from independent contractors to employees – with all the actual legal benefits and bargaining rights that entails.

The company has long been extremely reticent to classify these workers as “employees,” arguing their business model is unique in that it merely connects riders to customers, and is not a traditional “transportation company.” It owns no vehicles, drivers have no direct supervision and drivers are free to set their own hours, types of vehicles/services. The company does, however, insure drivers and provides a host of standards and criteria workers are required to meet.

However, Assembly Bill 5 – a broad piece of legislation that will become law if it gains the vote of the state senate as well as Gov. Gavin Newsom’s signature – would expand the definition of “independent contractor” to more closely match that which was outlined in last year’s California Supreme Court decision in Dynamex Operations West Inc. v. Los Angeles Superior Court. Continue Reading ›

Alleged Contractor Misclassification Could Cost Google – or Your Company – Millions

May 30, 2019 | by Nassiri Law

Tech giant Google is facing down the real possibility of a massive contractor misclassfication lawsuit that underscores just how pervasive this problem truly is.

Workers who are wrongful classified as contractors rather than employees are missing out on hundreds, thousands or even tens of thousands of dollars in wages and benefits, including overtime compensation, travel reimbursement, benefits like vacation time and sick leave and various kinds of insurance coverage. All the protections laid out in California’s wage and hour statutes – those only apply to employees. But of course – that’s exactly why it’s so pervasive, as it’s the company that classifies the workers – and many have long gotten away with it.

Google happens to be huge and high-profile, so the sheer volume of workers potentially involved is substantial. But Los Angeles employee misclassification lawyers know this problem is far from limited to large, international corporations. It’s true that industry giants like Microsoft, Lyft and Federal Express have had to pay huge compensation to misclassified workers over the years, but we’ve seen it too in mom-and-pop restaurants, manufacturing facilities, local car washes and retail operations.

If there is one good thing to come from the case, it’s that it will raise awareness of the issue. The Economic Policy Institute Estimates about one-fifth of all U.S. companies are currently misclassifying at least one worker. Continue Reading ›

Uber Settles California Driver Misclassification Lawsuit or $20 Million

March 12, 2019 | by Nassiri Law

A long-running legal battle with California and Massachusetts drivers for Uber has settled with the ride-sharing tech firm paying a $20 million settlement – but no deal to name them as employees versus independent contractors. Los Angeles employee misclassification attorneys know that has many legal analysts opining Uber was the one that actually won big this round.

The drivers likely acquiesced to this deal, rather than pushing ahead, after a federal appellate court ruled last September that drivers could not join together for a class action, and would instead be required to individually arbitrate each claim. As TechCrunch.com reported, that diminished a lot of the power plaintiffs in that original case had.

As part of the labor and employment lawsuit settlement, Uber has agreed to some other concessions as well. For example, Uber agreed to alter the way it removes drivers from the service, in turn boosting the transparency of the process. In a now-published policy, the tech firm details how it removes drivers from its rosters. The company also plans to institute a means for booted workers to appeal. Drivers will also have the chance to take classes offered by the firm to learn how to improve the quality of rides for customers.

Why Employee Classification Was a Key Issue for Uber Continue Reading ›

U.S. Supreme Court Allows 9th Circuit’s Ruling on CA Trucker Classification to Stand

March 10, 2019 | by Nassiri Law

When it comes to employee misclassification, the trucking industry was perhaps one of the worst offenders, driven in part by widening profit margins – reducing wages and benefits for would-be workers as well as liability for trucker negligence in crashes. But last year, the U.S. Court of Appeals for the Ninth Circuit ruled in California Trucking Association v. Su that proper classification of commercial drivers per the California’s Labor Commissioner’s Department of Industrial Relations’ reliance on the common law standard could not be preempted by federal law. Los Angeles employee misclassification attorneys know this was a major win for commercial truckers across the state. Now, with the U.S. Supreme Court’s recent declination to hear the California Trucking Association’s appeal of that ruling, it is a win for truckers nationally as well.

The case became one of the majority the high court rejects without further explanation (i.e., “Certiorari Denied”). Of the 7,000 or so cases the SCOTUS is asked to review each year, it only accepts somewhere between 100 and 150. (At least four justices must agree in order for the case to be accepted.)

The CTA argued in its appeal that the common law standard used by the state’s DIR was not consistent with certain aspects of deregulation per a 25-year-old federal aviation law. Further, the CTA argued that owner-operator truckers were to be classified as independent contractors, meaning they were paid set rates (not necessarily aligned with minimum wage and overtime hours, etc.) and that the drivers were to be responsible for their own expenses. Continue Reading ›

California Labor Commissioner: Retailers Jointly Liable for Trucker Labor Violations

January 4, 2019 | by Nassiri Law

Retailers have officially been put on notice by the California Labor Commission: If you hire trucking companies engage in unfair wage and hour practices against truck drivers, you too could be held jointly liable. Los Angeles truck driver wage and hour lawyers understand that to drive home the point, the agency posted a list of firms with outstanding court fines, tax liens and tax assessments can be held jointly and severally liable for future labor law violations committed by those companies.

The companies in question have been deemed by the commission and/or the courts to have committed wage theft against their workers, failing to pay them what they are owed by law. In many cases, the truck drivers were intentionally misclassified as independent contractors (rather than employees), in turn cheating them of pay benefits like workers’ compensation and unemployment. (This, as well as attempts to shield the firms from liability, which can be expensive, if the drivers are negligent and cause a serious truck accident resulting in someone else’s injury). Additionally some of the trucking companies are accused of failing to pay truck drivers minimum wages, overtime or other expenses.

Misclassification of employees in California is a serious problem, one that widens profit margins for the companies at the expense of everyone else – including and especially the workers. The reason this is illegal has to do with unfair competition. The idea is that these firms shouldn’t continue to pass on that unfair advantage to their retail contractors at the expense of workers and taxpayers. Continue Reading ›

California Trucking, Operators Sue Over State Contractor Test

November 3, 2018 | by Nassiri Law

The California trucking industry is one of many heavily scrutinized over its employee classification (or perhaps rather more aptly, employee misclassification). Many truck drivers are identified as independent contractors. Our Los Angeles employment attorneys know the obvious reason for that is trucking is a dangerous job. When truckers are considered “employees,” they must be paid overtime, given state-required breaks and workers’ compensation for injuries. Trucking companies can also be deemed vicariously liable in truck crashes involving negligent employee drivers versus, while they’d have to be found directly negligent in cases involving an independent contractor driver.

But now, two trucking contractors plus the California Trucking Association are suing the State of California over a mandated test trucking companies must take to ascertain whether a driver is an independent contractor or employee. In federal court, plaintiffs are seeking reversal of an employee-contractor test laid forth in the California Supreme Court in the case of Dynamex Operations West Inc. v. Superior Court of Los Angeles.

As Los Angeles employment attorneys can explain, the state high court in that case adopted the so-called “ABC Test,” to figure out whether a worker is an independent contractor or an employee. That was in April. Continue Reading ›