Employee or independent contractor? That is the question for many around the country who work in the “gig economy” for companies like Uber, Handy, HelloTech, and Zeel. This is an issue the lawyers at the Wage Authority Group must frequently assess, as most federal and state wage-and-hour laws only apply to employees, not independent contractors.
On February 8, 2018, a California court issued one of the first decisions addressing whether a worker in the gig economy—in this case a GrubHub driver–was an employee or independent contractor.
Applying California law, the court found the GrubHub driver to be an independent contractor, based on a variety of factors including:
- Grubhub did not control how he made the deliveries — whether by car, motorcycle, scooter or bicycle;
- Grubhub also did not control the driver’s appearance while he was making Grubhub deliveries;
- The driver was not required to have any Grubhub signage on his car and in fact did not have any such signage;
- Grubhub did not require the driver to undergo any particular training or orientation;
- The driver also worked for other gig economy companies, including Lyft, Uber and another meal delivery service, Postmates.
- The driver drove for these companies, including Grubhub, because the flexible scheduling allowed him to pursue his acting career.
The court noted that some factors weighed in favor of the driver being an employee, including the fact that the job required no special skills and that the delivery service was part of GrubHub’s regular business.
Nonetheless, the judge concluded that “While some factors weigh in favor of an employment relationship, Grubhub’s lack of all necessary control over [the driver’s] work, including how he performed deliveries and even whether or for how long, along with other factors persuade the Court that the contractor classification was appropriate.”
The court’s ruling does not apply to the gig economy as a whole, but some company’s may take it that way, and attempt to classify workers as independent contractors even when they exert far more control over them than Grubhub does over its drivers.
The legal landscape is evolving. The California Supreme Court is considering adopting a more protective test for employee status. One test the court may adopt is New Jersey’s so-called ABC test, which presumes workers are employees unless a business can show a worker is free from its supervision, works outside the usual course or place of business, and works “in an independently established trade, occupation, profession or business.”
Unfortunately, there is no app that tells gig economy workers whether they are protected under applicable labor laws. If you are interested in learning more, stay tuned for continuing coverage of these issues here at OwedUnpaidWages, and always feel free to contact the attorneys at the Wage Authority Group.