Articles Posted in Employee Classifications

Hundreds of thousands of California independent contractors and gig workers will likely not have to reimburse the state for overpaid Pandemic Unemployment Assistance (PUA) benefits.

The new COVID-19 stimulus package signed into law allows states to waive attempts to collect excessive PUA payments as long as workers meet two requirements:

  1. Their original PUA application was filed in good faith

A nearly decade-long court battle ends as national department store chain Burlington Stores Inc. has agreed to pay almost $20 million for misclassifying workers to avoid paying them overtime.

According to court records, roughly 1,630 employees will receive an average payment of $12,000 as part of the settlement. California workers are included under a second class-action suit filed against the company.

A nine-year court battle erupted over worker classifications

The November election appeared to provide some clarity over allowing companies like Lyft and Uber to avoid classifying their drivers as employees when voters approved Proposition 22.

The measure sought to free these companies from providing benefits to their workers, such as overtime, unemployment and sick leave. However, the fight over protections for these workers is likely to persist.

Companies still face challenges

California voters overwhelmingly approved Proposition 22 on election day after an aggressive record-setting $204 million campaign bankrolled by Uber, Lyft and other app-based companies.

Nearly six in 10 voters favored the measure that allows these companies to classify drivers as independent contractors, denying them benefits, such as overtime, paid sick days and even minimum wage.

Companies agree to provide “some” benefits

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

Under Proposition 22 on the November ballot, app-based transportation and delivery companies would be exempted from providing employee benefits to thousands of California drivers by classifying them as independent contractors.

Ride-sharing and delivery companies, including Lyft, Uber, and DoorDash, paid millions of dollars to put Prop 22 on the ballot. Their lawyers wrote this misleading initiative, and the companies paid political operatives to collect voter signatures to put it on the ballot.

How does Prop 22 hurt drivers?

California’s wage and hour laws allow employers to classify workers as exempt or non-exempt. But, what does that mean, and can a misclassified worker sue their employer?

Non-exempt workers are typically paid by the hour, qualifying for overtime, meal breaks and rest periods. Exempt employees are not entitled to the same benefits guaranteed under the Fair Labor Standards Act (FLSA) and California laws.

Who is exempt?

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