The California First District Court of Appeal says ride-sharing companies Uber and Lyft must treat Golden State drivers as employees and provide them with the appropriate pay and benefits.

The ruling affirms state court actions and legislators’ beliefs that gig workers do not have the independence necessary to be considered independent contractors.

Ruling decides lawsuit, but voters may have a say

The appeals court ruled in favor of a lawsuit filed in May by the state’s attorney general and the cities of Los Angeles, San Diego and San Francisco, forcing ride-hailing companies to comply with a new state labor law designed to protect gig workers as employees.

After a lower court ruled against the companies, Uber and Lyft appealed, allowing them – at least temporarily – to not comply with an order to hire drivers as employees immediately. The companies are now considering creating franchises in the state to avoid directly hiring drivers.

All parties await the outcome of a ballot measure, mostly written and paid for by app-based transportation and delivery companies allowing them to classify drivers as contractors, to avoid paying employee benefits. Voters will decide the fate of Proposition 22 on Nov. 3.

Independent contractors vs. regular employees

An estimated 53 million California workers are independent contractors, but many of them have been misclassified. To be legally considered an independent contractor, workers have unique characteristics such as:

  • Be in business for themselves
  • Decide where and when they work
  • Set their own pay rates
  • Work with multiple clients
  • Provide their own equipment and materials
  • Have skills or expertise that a company’s employees don’t have

Independent contractors must essentially be their own bosses. But despite having greater flexibility, they don’t have the same rights as regular employees. They aren’t entitled to overtime pay or even the minimum wage, are ineligible for health and unemployment benefits and aren’t protected by state and federal discrimination laws.

Fight for the pay and benefits you deserve

Many employers classify workers as independent contractors just to avoid the costs associated with regular employees. If you believe you have been wrongly classified, an experienced employment attorney can help you recover back pay, overtime and other benefits that you deserve.

Your lawyer can help you file a claim with the California labor commissioner. You may also be able to pursue a discrimination or retaliation complaint if a company takes adverse actions against you for seeking the compensation and rights afforded to you under the law.