After legislators in California passed the landmark bill earlier in the week that, if brought into a law, would force companies using the gig economy to identify the gig workers working for them as employees and hence give them benefits mandatory for employees.
However Uber’s chief legal officer said that the ride hailing company might not be directly be a target of the law.
Drivers working for the company however disagree.
A day after the California bill was passed, a lawsuit that seeks class-action status, was filed against Uber in federal court in California. Attorney Shannon Liss-Riordan had brought in the suit against Uber. She is well known as an individual who had previously brought in multiple lawsuits against the companies that function in the gig economy such as Uber, Lyft and Grubhub, over issues of such companies wrongly classifying their workers.
“Uber is claiming that the law doesn’t apply to it, which doesn’t pass the straight face test,” Liss-Riordan said. “The state of California has spoken — both through its Supreme Court and its legislature — that workers must be paid fair wages and that employers like Uber cannot avoid their responsibilities under the law.”
Uber currently identifies its workers as independent contractors and often referred to as workers of the gig economy. Such classification means that the workers do not get any of the benefits mandated for employees such as social security and paid leave, health insurance and overtime compensation. This format of business, according to many drivers, has resulted in their exploitation by the companies. The California bill that was passed last week and termed as AB 5 aims to secure those protections for the workers of the gig economy by classifying them as employees of the companies in the sector. The bill will become law once it is signed by California Gov. Gavin Newsom.
He doesn’t believe Uber will be beholden to the law, said Tony West, Uber’s chief legal officer, during a press call with reporters. “Because we continue to believe drivers are properly classified as independent … drivers will not be automatically be reclassified as employees, even after January of next year,” he said.
However the lawsuit filed against Uber by Liss-Riordan wants the court to place an injunction against Uber and forcing it to classify its drivers as employees. The lawsuit further asks the court to force direct Uber to pay its drivers in California minimum wages, over time and expense reimbursements. “Uber is a multibillion dollar company,” Liss-Riordan said. “It can afford to pay its workers properly if it wants to continue its business.”
It is likely that Uber would be facing a large number of lawsuits in California form drivers once the AB 5 bill becomes a law and goes into effect and if Uber still does not reclassify its drivers in California as employees.
The company is prepared for such suits, West said. “Uber is no stranger to legal battles,” he said. “We operate in a very regulated environment and we recognize that there will be legal challenges on all fronts.”
“I think it’s almost past is prologue here,” he continued. “I think it is an environment that we have gotten quite used to.”
(Adapted from CNet.com)