California Declares Uber Drivers ARE Employees

If you haven’t heard of Uber by now, let me briefly explain. Uber is a car service cheaper than that of a regular taxi because Uber drivers user their own car and choose when they work. Think of a ride-share or carpool that you pay for,but you don’t pay as much as a taxi. Long story short, Uber calls its drivers “contractors” because of the personal car use and their ability to decide when to work. This way Uber can avoid doing lots or normal employer things, like pay a wage or even take responsibility when one of its drivers beats someone with a hammer (happened last year). Various other reasons make it more favorable to classify their drivers as contractors as opposed to employees including healthcare and tax implication stemming from the PPACA (Patient Protection and Affordable Care Act). If drivers are classified as “contractors”, are Uber drivers employees?

California has ruled that one of its drivers IS an employee and NOT a contractor. While this doesn’t mean that ALL Uber drivers are employees, that could just be a matter of time until each driver is able to present his or her case and theoretically get the same ruling. Huboy, if I was an Uber executive, I’d be nervous. This opens the door to other Uber drivers in other states to do the same thing. Five other states already have.

The Employer Mandate is upon us. Best to get a solid classification before the tide hits.

Posted: June 18, 2015

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