Massachusetts adds to Uber and Lyft’s independent contractor misclassification legal battles, while California’s labor commissioner files a similar lawsuit against a carwash service app.
Massachusetts. The state of Massachusetts is suing Uber Technologies Inc. and Lyft Inc. alleging they misclassify drivers as independent contractors instead of employees, Attorney General Maura Healey announced July 14.
“Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years,” Healey said. “This business model is unfair and exploitative. We are seeking this determination from the court because these drivers have a right to be treated fairly.”
Under Massachusetts law, the drivers are employees, she said. The state’s three-part test for independent contractors requires that the worker is free from the company’s direction and control, the services the worker performs are outside the usual course of the company’s business, and the worker is engaged in an independently established business in the same nature as the service performed.
She is seeking a ruling that the drivers are employees under Massachusetts law and a court order granting them access to the rights and protections provided to employees — such as minimum wage, overtime and earned sick time.
The lawsuit is similar to one filed in May by California’s Attorney General alleging Uber and Lyft are misclassifying their drivers as independent contractors under California’s AB 5 law — the law that took effect Jan. 1 and aims to get tough on independent contractor misclassification.
“It’s a big boost that the Massachusetts attorney general is backing up what we’ve been saying for years,” Shannon Liss-Riordan, a Boston-based attorney who has led numerous lawsuits in both states against the two ride-sharing companies, told NBC News.
California. California’s Labor Commissioner’s Office filed a lawsuit against a gig-economy car wash company in Southern California for violating labor laws by misclassifying employees as independent contractors.
The suit alleges Mobile Wash Inc. in Bellflower, California, misclassified at least 100 workers. It also names Mobile Wash’s president and CEO, Alfred Davtyan.
This is the first lawsuit filed by the Labor Commissioner’s Office to enforce AB 5, the 2019 law that makes independent contractor classification more difficult.
Mobile Wash uses a phone app to offer car washing and detailing services to customers throughout Southern California and a few locations in Northern California. The Labor Commissioner’s Office said the company requires its workers to use their own cars and buy their own uniforms, insurance, cleaning equipment, supplies and gas. It also alleges Mobile Wash does not reimburse the workers for these business expenses or travel time, in violation of the requirement to pay for all hours worked at no less than the minimum wage. It also unlawfully charges workers a $2 “transaction fee” for every tip left on a credit card.
An analysis by the Labor Commissioner’s Office found one Mobile Wash employee working for 10 hours a day, 6 days a week is entitled to $1,521 per week for unpaid wages including minimum wage and overtime violation, liquidated damages, rest period violations, reimbursements of business expenses and recovery of stolen tips, and other violations including but not limited to failure to provide paid sick leave.