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Ruling Forces Ridesharing Services to Reclassify Drivers as Employees in California
The future of ridesharing services, such as Uber and Lyft, in California are very much in jeopardy as on Thursday, a California appeals court stated that the two companies must reclassify their drivers as employees rather than independent contractors. The decision, which reaffirms a lower court’s ruling, gives Uber and Lyft 30 days to comply with the ruling, assuming they do not appeal the decision. For years, ridesharing services have…
Applying California’s ABC Test to Determine Employee Status
The assessment of whether a worker is an independent contractor or an employee is a fact-intensive inquiry. Moreover, different tests apply depending on the law. Thus, while a worker may be classified as an independent contractor under federal tax law, the same worker may be classified as an employee under the Fair Labor Standards Act, the federal law covering minimum wage and overtime. The three general categories of tests are: (1)…
Avoiding the Misclassification of Workers Through ABC Tests
The ABC test has given employers a three-pronged definition to categorize a worker as either an employee or an independent contractor. More than 20 states have enacted elements of the ABC test, which was initially introduced after a 2018 court case in California established its new criteria. The criteria lay out three elements that must be evaluated to determine the status of a worker. If the worker meets all three…
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