An Uber driver was ruled an employee while, separately, a legislator introduced a new bill to help employers by clarifying IC status.
An Uber driver was ruled an employee while, separately, a legislator introduced a new bill to clarify IC status, according to recent reports.
The San Jose Mercury News reports a Florida agency ruled an Uber driver is an employee in the case of a man who filed for unemployment benefits after the ride-sharing service deactivated his account. Uber can still appeal the decision.
Uber, along with Lyft and other online firms that use independent contractors to provide services, have also come under fire with lawsuits from drivers claiming they are employees and not independent contractors.
The lawsuits could be extremely damaging to companies like Uber that aim to serve as platforms matching users with independent contractors.
“Uber may choose to appeal this decision but before the trickle of cases like this becomes a flood they may be better advised to review their business model and reduce the level of control they have over drivers,” said Fiona Coombe, director of legal and regulatory research at Staffing Industry Analysts. “It is this question of control over what service, and how the service is provided, that is the focus of these cases, and which could prove to be very costly if drivers are found to be employees.”
Separately, legislation to clarify who is an independent contractor was introduced by Rep. Erik Paulsen, R-Minn. He believes the legislation will provide direction to employers. The Customized Logistics and Delivery Association is supporting the bill. The association, which represents the US courier industry, lauded the move.
“This bill provides much-needed clarity and guidance for businesses that partner with independent contractors to provide the flexibility of their workforce they need to meet customer needs,” said Kirk Godby, president of the Customized Logistics and Delivery Association. “Over 89% of CLDA’s members said that their ability to utilize independent contractors was important to their business success, in a recent survey conducted by the association.”
The bill, H.R. 2483, puts forth a two-part test that establishes a formal definition of who is an independent contractor, according to the association. The two criteria to determine status would be: “the individual either has investment in equipment or is subject to income fluctuation” and “the individual has control of time worked and performance of services.” The legislation would also clarify a safe harbor provision of the tax code which will also help define an independent contractor.
The bill is now in the Ways and Means Committee.
“Some in Washington want to make it more difficult for businesses to use independent contractors, it’s time to tell the employer side of the story,” Paulsen said. “That’s why I introduced this legislation, which provides clarity and guidance for employers so they know they are properly classifying independent contractors. This certainty will allow businesses in Minnesota and across the country to grow and create a healthier economy.”