Uber and Lyft have grabbed headlines in their legal battle over independent contractor classification. However, a taxi company in California recently agreed to pay $522,300 to settle claims it misclassified 30 drivers as independent contractors and refused them workers’ compensation insurance, the California Department of Industrial Relations announced.
The Healdsburg Cab Company’s owners, Kevin and Jennifer Kroh, will only pay $200,000 in installments under the agreement. The full $522,300 won’t be due unless they default on the $200,000, which is due by June.
In addition, the company agreed to cease operations as of last Saturday.
Healdsburg Cab Company had failed to provide workers’ comp coverage and misclassified its drivers from 2011 to 2014, according to an investigation by the Department of Industrial Relations.
“Hard working business owners across California get up every day and play by the rules, even when it isn’t always easy. This case sends a powerful message to businesses that break those rules by misclassifying their employees,” said California Labor Commissioner Julie Su.