Wednesday, May 2, 2018

"Ahem! Uber, Lyft etc: California Supremes just shook your gig economy with contractor ruling"

From The Register:

Now it's a little more tricky to claim a worker isn't a staffer
The business models of Uber, Lyft, Instacart, TaskRabbit, GrubHub and numerous other "gig economy" companies may need an overhaul following a decision by the California Supreme Court to redefine when someone is a contractor or an employee.

In a decision this week that went against delivery company Dynamex Operations West, the US state's top court ditched a key test for determining if someone is an employee – and put its weight behind a simpler one that has the knock-on effect of making it much harder to claim people working for an organization are not employees.

Dynamex decided in 2004 that its drivers – who had previously been employees – were now independent contractors. The drivers sued and lost. They appealed and won in appeals court. The company then appealed that decision. And now the Supreme Court has decided: the appeals court was right and the drivers were employees.

The impact may be significant: if someone is taken to be an employee, the company becomes legally responsible for ensuring they meet minimum wage and overtime laws, offer unemployment insurance, rest breaks, pay payroll taxes and so on.

That is not only an administrative burden that can cost a business 20 per cent or more per employee but can also greatly reduces a company's flexibility, likely requiring it to do more with fewer people....MUCH MORE