Super Cali goes ballistic – Uber says it's bogus (even though its contract is something quite atrocious) A California labor commission has ruled that an Uber driver has won the right to be treated as an employee of the taxi app upstart, rather than as a contractor. The decision threatens to disrupt the disruptive tech biz: moneybags Uber keeps its costs fantastically low by treating its drivers as freelancers, meaning they have …
This is where techies learn that the law is not like code. It doesn't matter what you say something is, the law will look at what it actually does. So if somebody walks like an employee and quacks like an employee, they're an employee, however much you may want to call them a contractor.
BTW, it's not like this is new: Microsoft got burned many years ago over thousands of "contractors" who worked for Microsoft, and only Microsoft, for years on end. "Hey", said the IRS, "those look awfully like employees to us".
UK law keeps trying to tighten down on the 'quacks like, therefore is' definition of an employee, and yet I still have to be a limited company and do this little pretence when I am in fact an employee, int hat I must work at a location specified by my company, to hours a manager sets for me, and carry out work set my management.
It's a total lie so that companies can dodoge the responsibilities of having all that employee overhead.
But as I can charge a handsome day-rate, I don't bitch. But I would be a Ltd if it weren't for them, I'd be a sole trader.
Thanks for the duck typing explanation, I'm going to use it a lot in my discussions with literal-minded engineers.
That, and the appropriate XKCD.
UK Ltd company...
Yes, except if HMRC decide you actually are acting as an employee, IR35 will info all the ducking and diving anyway. Your company should be able to substitute labour, take other contracts and clients, and certainly not be engaged for more than 2 years. The goalposts will shuffle a little, but if you're not the lowest hanging fruit you're probably fine for now.
This is, indeed, an homage to the Liverpool Echo's headline (later used by the Sun). We've pointed that out the last time we did a Super Cali heady.
As for the rhythm of the headline: yes, we did sing it out loud, and yes, it is missing a syllable. However, we felt it worked better with a pause to skip the missing beat rather than squeeze in a boring word like 'terms' that would have changed "is something" to "are something" and ruined everything.
Headlines. A serious business.
C.
for one person, this ruling sets a precedent that all contract employees (for any purpose) are not contract anymore. Really, there cannot be a taxi business that doesn't use freelancers
That spells a lot of trouble for a whole lot of "employers" including those in IT.
Glad to see the labor department does not need to live by their earlier decisions.
If you follow the link to the ruling (from the article) and scroll down to the legal reasoning, there's specifics for why the commission decided that the plaintiff was acting as an employee, and several precedents (among them a case against Yellow Cab from 1991). Part of the reasoning is a list of some of the criteria for considering someone an employee rather than an independent contractor - worth the read.
There are all sorts of issues at stake here including health insurance and, even worse, taxes. Uber could become liable for every cent of state and federal income taxes and the employee's portion (as well as employer's portion) of their Social Security tax payments not made in the past. Generally speaking, under US Federal law, if an employer fails to withhold taxes from an employee as required, the employer becomes liable for paying the taxes.
I'm sure Uber will be getting their lawyers going on this one.
... have had 100s of years knowing what and employee is and what constitutes employment. Some spiv operator of whatever business doesn't get to rewrite them rules. That's what Alcatraz was used for. I believe it still sits just off the SF harbour as a reminder.
Okay, reading through the ruling, I think I dislike the plaintiff.
I am no fan of Uber (as I don't use them) but what I can gather is that the driver wants two things:
1. To be paid expenses, primarily fuel costs.
2. To be paid minimum wages/overtime/double-time, etc...
The latter of these seems to be Ms Berwick trying to weasel money out of Uber through deception and technicalities. Not that I am adverse to technicalities, but from my reading of the ruling, Ms Berwick setup a company and then, after claiming wages, asserted that she had no control over that company or visibility into its records and account.
That's clearly ridiculous and thankfully this was dismissed as the initial burden of proof is on her and she refused to provide any evidence of what she was paid, saying that "corporation retained [those records]". To me, that sounds very much like she was trying to double-dip - to be paid through her company and then arguing that she didn't get paid enough while refusing to provide any evidence.
The claim for expenses is ultimately rather boring as it follows naturally from the ruling that the plaintiff was indeed an employee of Uber, which is, of course, the meat of the issue.
The arguments used here are rather persuasive, particularly this nugget:
"Plaintiff's work was integral to Defendants' business. Defendants are in business to provide transportation services to passengers. Plaintiff did the actual transporting of those passengers. Without drivers such as Plaintiff, Defendants' business would not exist."
In other words, you hire contractors, generally, to perform specialised functions that you don't have internal expertise for, but that do not make up the totality of your business. Or, as I see it, if you had no contractors, you should still have a business. That is clearly not the case with Uber as all the people performing the main function of the business are, apparently, 'contractors'.
There are some good points around the 'control' that the various parties have over the operation, which is a core issue in determining the relationship. Likewise the ability of the driver to "affect profit or loss", seeing as she was paid a "non-negotiable service fee".
I think my favourite part of the ruling, other than the typo that claimed the driver "drove 132 hours per day for 49 days", was the following comment:
"Defendants refer to 'industry standards' with respect to drivers' cars, however, it is unclear to waht industry, other than the 'taxi' industry, Defendants are referring."
Which obviously ties in to the precedent, as it involves a taxi company.
When I was working as a morning newspaper delivery boy 30 years ago, a group challenged the newspaper over their poor treatment of the delivery boys under employment law. The newspaper claimed that they were independent contractors, but the judge ruled that the newspaper could not call them independent and still control the end price of the newspaper to customers and the delivery terms and conditions. Welcome to the law, Uber.
I regularly hear Uber referred to in news reports as a "ride sharing" operation. It's a taxi service.
Methinks it's a taxi service that seeks to avoid the many restrictions imposed on existing taxi services. I see arguments on both sides of that issue, but to pretend it's anything other than a taxi service is ridiculous.
Here in Vancouver the restrictions on taxi licenses have meant that one is worth a lot of money, in the hundreds of thousands of dollars IIRC. Also happens in Canada with food producer quotas, and while the original intent to ensure a reasonable return is laudable, the result smells and it prohibits real competition.
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