Thanks to a recent California Supreme Court ruling, it is now more difficult for companies operating in California to say that rideshare drivers are independent contractors. This could mean big changes for Lyft and Uber drivers.
According to the Los Angeles Times‘ Andrew Khouri and Tracey Lien, many companies might have to reclassify their drivers as employees and not as independent contractors.
Changes To Uber And Lyft Employment Classification In California: What To Know
Generally speaking, rideshare drivers are considered either employees (that is, their employers take taxes out of their paycheck and give them regular work schedules) or independent contractors (where workers do not have taxes taken out of their checks and more or less work when they want).
This court decision clarifies whether workers are considered employees or not who work with these companies. It suggests a “ABC Test” for workers to determine whether they are employees:
“(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”
While it’s too early to tell what the law means exactly, rideshare drivers should keep an eye out for what happens next. Depending on how it goes, drivers could potentially have an easier time when tax season comes around.
Changes To Uber And Lyft Employment Classification In California: Other Resources
Uber, Lyft and other gig jobs may face a shakeup under new California work rules [Andrew Khouri, Tracey Lien / Los Angeles Times]