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Examining Worker Classification In The Shared Economy

by Spencer Hamer
June 23, 2015

Spencer Hamer's article, "Examining Worker Classification In The Shared Economy," was published in Law360 on June 23, 2015.

From the article...

"On June 3, 2015, a California labor commissioner hearing officer ruled that a driver for the shared economy ride-hailing service Uber Technologies Inc. should be classified as an employee, not an independent contractor. Uber appealed the decision on June 16. See Uber v. Berwick, CGC-15-546378 (S.F. Sup. Ct., filed June 16, 2015.) The decision was contrary to a prior ruling from the same agency, issued in 2012, which was not mentioned in the decision. In a statement, Uber said the decision was “nonbinding and applies to a single driver.” The company said individual cases about worker classification in at least five other states, including Georgia, Pennsylvania and Texas, have resulted in rulings that categorize drivers as contractors.

The claimant in the California matter, Barbara Ann Berwick, alleged that she was owed unpaid wages, unreimbursed expenses for gas and toll fares and related statutory damages and penalties. The hearing officer, Stephanie Barrett, started with the threshold jurisdictional issue of whether Berwick was an employee of Uber or an independent contractor. Barrett's ruling began by indicating that in California, there is an inference of employment if personal services are performed as opposed to business services.

Barrett then considered the factors for employee status established by the California Supreme Court in S.G. Borello & Sons Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341: (1) whether the person performing services is engaged in an occupation or business distinct from that of the principal; (2) whether or not the work is a part of the regular business of the principal or alleged employer; (3) whether the principal or the worker supplies the instrumentalities, tools and the place for the person doing work; (3) the alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers; (4) whether the service rendered requires a special skill; (5) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervisors; (6) the alleged employee’s opportunity for profit or loss depending on his or her managerial skill; (7) the length of time for which the services are to be performed; (8) the degree of performance of the working relationship; (9) the method of payment, whether by time or by the job; and (10) whether or not the parties believe they are creating an employer-employee relationship."

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