Hot Topic: Uber and the Workers’ Compensation System

Workers' Compensation Benefits & Uber.

These days, it seems like everyone knows someone who works for Uber. After all, the perks are pretty appealing – drivers enjoy flexible hours, the opportunity to meet new people, not to mention a free iPhone. From the surface, driving for a rideshare company like Uber seems like a great way to make extra cash without having to punch a clock. Unfortunately, that’s where the advantages end. 

Uber has been slapped with a number of lawsuits over the past few years due to its longstanding practice of classifying its drivers as independent contractors, rather than employees. Why is this significant? In California, employees are provided benefits and protections that independent contractors aren’t entitled to. Among them are wage and hour laws, reimbursement of business expenses, antidiscrimination laws, payroll withholdings and unemployment benefits. What’s more, independent contractors are ineligible to file for workers’ compensation should they get injured on the job.

Uber and the Workers’ Compensation System

Let’s say you’re an Uber driver and a passenger physically assaults you. The altercation leaves you with a broken nose and unable to drive and earn income for several weeks. If you were an employee of Uber, you could report the incident and file for workers’ compensation to cover any related medical expenses and missed wages. But, since you’re labeled as an independent contractor, you must pay out of pocket for your hospital visit and won’t receive any money while you’re unable to work. 

If this seems unethical, that’s because it is. Uber is avoiding having to provide benefits for its drivers by misclassifying them as independent contractors. However, the California Labor Commissioner’s Office has reached a decision that could have massive implications for the rideshare company. In 2014, a driver filed a wage complaint seeking reimbursement for outstanding business expenses, namely gas and tolls. Uber argued that the driver was not an employee and was therefore not entitled to reimbursement. The commission disagreed, and the driver was ultimately awarded over $4,000. 

Though it was a major victory, this ruling only applies to the woman who filed the lawsuit. However, it has set a precedent for many other drivers to file lawsuits against Uber. Most recently, Uber reached a landmark settlement in two class action lawsuits wherein the company will have to pay as much as $100 million to the drivers represented in the case. However, as part of the settlement, Uber will continue to be able to categorize its drivers as independent contractors, rather than employees. 

The Uber Workers' Compensation Fight Isn’t Over

Though Uber may be one step closer to its goal of continuing to categorize drivers as independent contractors, it’s important to note that the case is merely settled – not decided. The agreement is subject to approval by Judge Edward M. Chen when the case goes to trial before a jury.

Do You Work for Uber?

If you drive for Uber or another rideshare company and feel you’ve been misclassified as an independent contractor, please call us. At the Law Offices of Gerald D. Brody & Associates in San Diego, one of our experienced attorneys would be happy to review your case to see if you may be entitled to payment of business expenses, interest, penalties and more. Contact us today at (619) 528-9800 to set up your free, initial consultation.