California is home to some of the nation’s most innovative and successful computer and Internet companies, and many of the most recent technology success stories have involved so-called on-demand businesses like the transportation company Uber. These businesses offer their customers value and convenience by allowing them to book a cab or have groceries delivered at a moment’s notice, but their hiring practices have been widely criticized.
Many of these new technology firms classify their workers as independent contractors rather than employees, which means that they do not make Social Security contributions on their behalf or provide them with workers’ compensation coverage. While this may be good news for customers hoping to save money, it leaves workers who fail to adequately plan for retirement with the prospect of a bleak future. In addition to being venerable should they suffer a work-related injury, independent contractors are not protected by most labor laws and usually lack access to employee benefits like health care packages and 401K programs.
Critics fear that the success of this business model could spawn an underclass of Internet workers with few legal protections and no ability to unionize. However, some experts predict that things will change in 2016. They point to a growing number of lawsuits filed against on-demand businesses by disgruntled workers including litigation brought against Uber that has gained class action status and will likely go to trial. Lawmakers are also beginning to take notice of the situation. The state of Washington has already passed a law allowing drivers to organize even if they are classified as independent contractors, and a bill has been introduced in California that would grant this right to all on-demand workers.
Employment law attorneys may take action against employers on behalf of workers who have been misclassified as independent contractors in order to save money and skirt the protections provided by wage and hour laws. An attorney could also explain to workers considering taking this path the criteria that the courts may use to determine if a worker is an employee or contractor.